Donation
G.R. No. 120721 February 23, 2005
MANUEL G. ABELLO, JOSE C. CONCEPCION,
TEODORO D. REGALA, AVELINO V.
CRUZ, petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and
COURT OF APPEALS, respondents.
DECISION
AZCUNA, J.:
This is a petition for review on certiorari under Rule 45
of the Rules of Civil Procedure, assailing the decision
of the Court of Appeals in CA –G.R. SP No. 27134,
entitled "Comissioner of Internal Revenue v. Manuel
G. Abello, Jose C. Concepcion, Teodoro D. Regala,
Avelino V. Cruz and Court of Tax Appeals," which
reversed and set aside the decision of the Court of
Tax Appeals (CTA), ordering the Commissioner of
Internal Revenue (Commissioner) to withdraw his
letters dated April 21, 1988 and August 4, 1988
assessing donor’s taxes and to desist from collecting
donor’s taxes from petitioners.
During the 1987 national elections, petitioners, who
are partners in the Angara, Abello, Concepcion,
Regala and Cruz (ACCRA) law firm, contributed
₱882,661.31 each to the campaign funds of Senator
Edgardo Angara, then running for the Senate. In
letters dated April 21, 1988, the Bureau of Internal
Revenue (BIR) assessed each of the petitioners
₱263,032.66 for their contributions. On August 2,
1988, petitioners questioned the assessment through
a letter to the BIR. They claimed that political or
electoral contributions are not considered gifts under
the National Internal Revenue Code (NIRC), and that,
therefore, they are not liable for donor’s tax. The claim
for exemption was denied by the Commissioner.1 1ªvvphi1.nét
On September 12, 1988, petitioners filed a petition for
review with the CTA, which was decided on October
7, 1991 in favor of the petitioners. As aforestated, the
CTA ordered the Commissioner to desist from
collecting donor’s taxes from the petitioners.2
On appeal, the Court of Appeals reversed and set
aside the CTA decision on April 20, 1994.3 The
appellate Court ordered the petitioners to pay donor’s
tax amounting to ₱263,032.66 each, reasoning as
follows:
The National Internal Revenue Code, as amended,
provides:
Sec. 91. Imposition of Tax. (a) There shall be levied,
assessed, collected, and paid upon the transfer by
any person, resident, or non-resident, of the property
by gift, a tax, computed as provided in Section 92. (b)
The tax shall apply whether the transfer is in trust or
otherwise, whether the gift is direct or indirect, and
whether the property is real or personal, tangible or
intangible.
Pursuant to the above-quoted provisions of law, the
transfer of property by gift, whether the transfer is in
trust or otherwise, whether the gift is direct or indirect,
1
and whether the property is real or personal, tangible
or intangible, is subject to donor’s or gift tax.
A gift is generally defined as a voluntary transfer of
property by one to another without any consideration
or compensation therefor (28 C.J. 620; Santos vs.
Robledo, 28 Phil. 250).
In the instant case, the contributions are voluntary
transfers of property in the form of money from private
respondents to Sen. Angara, without considerations
therefor. Hence, they squarely fall under the definition
of donation or gift.
As correctly pointed out by the Solicitor General:
The fact that the contributions were given to be used
as campaign funds of Sen. Angara does not affect the
character of the fund transfers as donation or gift.
There was thereby no retention of control over the
disposition of the contributions. There was simply an
indication of the purpose for which they were to be
used. For as long as the contributions were used for
the purpose for which they were intended, Sen.
Angara had complete and absolute power to dispose
of the contributions. He was fully entitled to the
economic benefits of the contributions.
Section 91 of the Tax Code is very clear. A donor’s or
gift tax is imposed on the transfer of property by gift.
1aw phi1.nét
The Bureau of Internal Revenue issued Ruling No.
344 on July 20, 1988, which reads:
Political Contributions. – For internal revenue
purposes, political contributions in the Philippines are
considered taxable gift rather than taxable income.
This is so, because a political contribution is
indubitably not intended by the giver or contributor as
a return of value or made because of any intent to
repay another what is his due, but bestowed only
because of motives of philanthropy or charity. His
purpose is to give and to bolster the morals, the
winning chance of the candidate and/or his party, and
not to employ or buy. On the other hand, the
recipient-donee does not regard himself as
exchanging his services or his product for the money
contributed. But more importantly he receives
financial advantages gratuitously.
When the U.S. gift tax law was adopted in the
Philippines (before May 7, 1974), the taxability of
political contributions was, admittedly, an unsettled
issue; hence, it cannot be presumed that the
Philippine Congress then had intended to consider or
treat political contributions as non-taxable gifts when it
adopted the said gift tax law. Moreover, well-settled is
the rule that the Philippines need not necessarily
adopt the present rule or construction in the United
States on the matter. Generally, statutes of different
states relating to the same class of persons or things
or having the same purposes are not considered to be
in pari materia because it cannot be justifiably
presumed that the legislature had them in mind when
enacting the provision being construed. (5206,
Sutherland, Statutory Construction, p.
546.) Accordingly, in the absence of an express
exempting provision of law, political contributions in
the Philippines are subject to the donor’s gift
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tax. (cited in National Internal Revenue Code
Annotated by Hector S. de Leon, 1991 ed., p. 290).
In the light of the above BIR Ruling, it is clear that the
political contributions of the private respondents to
Sen. Edgardo Angara are taxable gifts. The
vagueness of the law as to what comprise the gift
subject to tax was made concrete by the above-
quoted BIR ruling. Hence, there is no doubt that
political contributions are taxable gifts.4
Petitioners filed a motion for reconsideration, which
the Court of Appeals denied in its resolution of June
16, 1995.5
Petitioners thereupon filed the instant petition on July
26, 1995. Raised are the following issues:
1. DID THE HONORABLE COURT OF
APPEALS ERR WHEN IT FAILED TO
CONSIDER IN ITS DECISION THE
PURPOSE BEHIND THE ENACTMENT OF
OUR GIFT TAX LAW?
2. DID THE HONORABLE COURT OF
APPEALS ERR IN NOT CONSIDERING THE
INTENTION OF THE GIVERS IN
DETERMINING WHETHER OR NOT THE
PETITIONERS’ POLITICAL
CONTRIBUTIONS WERE GIFTS SUBJECT
TO DONORS TAX?
3. DID THE HONORABLE COURT OF
APPEALS ERR WHEN IT FAILED TO
CONSIDER THE DEFINITION OF AN
"ELECTORAL CONTRIBUTION" UNDER
THE OMNIBUS ELECTION CODE IN
DETERMINING WHETHER OR NOT
POLITICAL CONTRIBUTIONS ARE
TAXABLE?
4. DID THE HONORABLE COURT OF
APPEALS ERR IN NOT CONSIDERING THE
ADMINISTRATIVE PRACTICE OF CLOSE
TO HALF A CENTURY OF NOT
SUBJECTING POLITICAL CONTRIBUTIONS
TO DONORS TAX?
5. DID THE HONORABLE COURT OF
APPEALS ERR IN NOT CONSIDERING THE
AMERICAN JURISPRUDENCE RELIED
UPON BY THE COURT OF TAX APPEALS
AND BY THE PETITIONERS TO THE
EFFECT THAT POLITICAL
CONTRIBUTIONS ARE NOT TAXABLE
GIFTS?
6. DID THE HONORABLE COURT OF
APPEALS ERR IN NOT APPLYING
AMERICAN JURISPRUDENCE ON THE
GROUND THAT THIS WAS NOT KNOWN AT
THE TIME THE PHILIPPINES GIFT TAX
LAW WAS ADOPTED IN 1939?
7. DID THE HONORABLE COURT OF
APPEALS ERR IN RESOLVING THE CASE
MAINLY ON THE BASIS OF A RULING
ISSUED BY THE RESPONDENT ONLY
2
AFTER THE ASSESSMENTS HAD
ALREADY BEEN MADE?
8. DID THE HONORABLE COURT OF
APPEALS ERR WHEN IT DID NOT
CONSTRUE THE GIFT TAX LAW
LIBERALLY IN FAVOR OF THE TAXPAYER
AND STRICLTY AGAINST THE
GOVERNMENT IN ACCORDANCE WITH
APPLICABLE PRINCIPLES OF STATUTORY
CONSTRUCTION?6
First, Fifth and Sixth Issues
Section 91 of the National Internal Revenue Code
(NIRC) reads:
(A) There shall be levied, assessed, collected
and paid upon the transfer by any person,
resident or nonresident, of the property by gift,
a tax, computed as provided in Section 92
(B) The tax shall apply whether the transfer is
in trust or otherwise, whether the gift is direct
or indirect, and whether the property is real or
personal, tangible or intangible.
The NIRC does not define transfer of property by gift.
However, Article 18 of the Civil Code, states:
In matters which are governed by the Code of
Commerce and special laws, their deficiency shall be
supplied by the provisions of this Code.
Thus, reference may be made to the definition of a
donation in the Civil Code. Article 725 of said Code
defines donation as:
. . . an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who
accepts it.
Donation has the following elements: (a) the
reduction of the patrimony of the donor; (b) the
increase in the patrimony of the donee; and, (c)
the intent to do an act of liberality or animus
donandi.7
The present case falls squarely within the definition of
a donation. Petitioners, the late Manuel G. Abello8 ,
Jose C. Concepcion, Teodoro D. Regala and Avelino
V. Cruz, each gave ₱882,661.31 to the campaign
funds of Senator Edgardo Angara, without any
material consideration. All three elements of a
donation are present. The patrimony of the four
petitioners were reduced by ₱882,661.31 each.
Senator Edgardo Angara’s patrimony correspondingly
increased by ₱3,530,645.249 . There was intent to do
an act of liberality or animus donandi was present
since each of the petitioners gave their contributions
without any consideration.
Taken together with the Civil Code definition of
donation, Section 91 of the NIRC is clear and
unambiguous, thereby leaving no room for
construction. In Rizal Commercial Banking
Corporation v. Intermediate Appellate Court10 the
Court enunciated:
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It bears stressing that the first and fundamental duty
of the Court is to apply the law. When the law is clear
and free from any doubt or ambiguity, there is no
room for construction or interpretation. As has been
our consistent ruling, where the law speaks in clear
and categorical language, there is no occasion for
interpretation; there is only room for application (Cebu
Portland Cement Co. v. Municipality of Naga, 24
SCRA 708 [1968])
Where the law is clear and unambiguous, it must be
taken to mean exactly what it says and the court has
no choice but to see to it that its mandate is obeyed
(Chartered Bank Employees Association v. Ople, 138
SCRA 273 [1985]; Luzon Surety Co., Inc. v. De
Garcia, 30 SCRA 111 [1969]; Quijano v. Development
Bank of the Philippines, 35 SCRA 270 [1970]).
Only when the law is ambiguous or of doubtful
meaning may the court interpret or construe its true
intent. Ambiguity is a condition of admitting two or
l^vvphi1.net
more meanings, of being understood in more than
one way, or of referring to two or more things at the
same time. A statute is ambiguous if it is admissible of
two or more possible meanings, in which case, the
Court is called upon to exercise one of its judicial
functions, which is to interpret the law according to its
true intent.
Second Issue
Since animus donandi or the intention to do an act of
liberality is an essential element of a donation,
petitioners argue that it is important to look into the
intention of the giver to determine if a political
contribution is a gift. Petitioners’ argument is not
tenable. First of all, donative intent is a creature of
the mind. It cannot be perceived except by the
material and tangible acts which manifest its
presence. This being the case, donative intent is
presumed present when one gives a part of ones
patrimony to another without consideration. Second,
donative intent is not negated when the person
donating has other intentions, motives or purposes
which do not contradict donative intent. This Court is
not convinced that since the purpose of the
contribution was to help elect a candidate, there
was no donative intent. Petitioners’ contribution
of money without any material consideration
evinces animus donandi. The fact that their
purpose for donating was to aid in the election of
the donee does not negate the presence of
donative intent.
Third Issue
Petitioners maintain that the definition of an "electoral
contribution" under the Omnibus Election Code is
essential to appreciate how a political contribution
differs from a taxable gift.11 Section 94(a) of the said
Code defines electoral contribution as follows:
The term "contribution" includes a gift, donation,
subscription, loan, advance or deposit of money or
anything of value, or a contract, promise or
agreement to contribute, whether or not legally
enforceable, made for the purpose of influencing the
results of the elections but shall not include services
rendered without compensation by individuals
volunteering a portion or all of their time in behalf of a
3
candidate or political party. It shall also include the
use of facilities voluntarily donated by other persons,
the money value of which can be assessed based on
the rates prevailing in the area.
Since the purpose of an electoral contribution is to
influence the results of the election, petitioners again
claim that donative intent is not present. Petitioners
attempt to place the barrier of mutual exclusivity
between donative intent and the purpose of political
contributions. This Court reiterates that donative
intent is not negated by the presence of other
intentions, motives or purposes which do not
contradict donative intent.
Petitioners would distinguish a gift from a political
donation by saying that the consideration for a gift is
the liberality of the donor, while the consideration for a
political contribution is the desire of the giver to
influence the result of an election by supporting
candidates who, in the perception of the giver, would
influence the shaping of government policies that
would promote the general welfare and economic
well-being of the electorate, including the giver
himself.
Petitioners’ attempt is strained. The fact that
petitioners will somehow in the future benefit from the
election of the candidate to whom they contribute, in
no way amounts to a valuable material consideration
so as to remove political contributions from the
purview of a donation. Senator Angara was under no
obligation to benefit the petitioners. The proper
performance of his duties as a legislator is his
obligation as an elected public servant of the Filipino
people and not a consideration for the political
contributions he received. In fact, as a public servant,
he may even be called to enact laws that are contrary
to the interests of his benefactors, for the benefit of
the greater good.
In fine, the purpose for which the sums of money
were given, which was to fund the campaign of
Senator Angara in his bid for a senatorial seat, cannot
be considered as a material consideration so as to
negate a donation.
Fourth Issue
Petitioners raise the fact that since 1939 when the
first Tax Code was enacted, up to 1988 the BIR never
attempted to subject political contributions to donor’s
tax. They argue that:
. . . It is a familiar principle of law that prolonged
practice by the government agency charged with the
execution of a statute, acquiesced in and relied upon
by all concerned over an appreciable period of time, is
an authoritative interpretation thereof, entitled to great
weight and the highest respect. . . .12
This Court holds that the BIR is not precluded from
making a new interpretation of the law, especially
when the old interpretation was flawed. It is a well-
entrenched rule that
. . . erroneous application and enforcement of the law
by public officers do not block subsequent correct
application of the statute (PLDT v. Collector of
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Internal Revenue, 90 Phil. 676), and that the

Government is never estopped by mistake or error on
the part of its agents (Pineda v. Court of First Instance
of Tayabas, 52 Phil. 803, 807; Benguet Consolidated
Mining Co. v. Pineda, 98 Phil. 711, 724).13

Seventh Issue

Petitioners question the fact that the Court of Appeals

decision is based on a BIR ruling, namely BIR Ruling
No. 88-344, which was issued after the petitioners
were assessed for donor’s tax. This Court does not
need to delve into this issue. It is immaterial whether
or not the Court of Appeals based its decision on the
BIR ruling because it is not pivotal in deciding this
case. As discussed above, Section 91 (now Section
98) of the NIRC as supplemented by the definition of
a donation found in Article 725 of the Civil Code, is
clear and unambiguous, and needs no further
elucidation.

Eighth Issue

Petitioners next contend that tax laws are construed

liberally in favor of the taxpayer and strictly against
the government. This rule of construction, however,
does not benefit petitioners because, as stated, there
is here no room for construction since the law is clear
and unambiguous.

Finally, this Court takes note of the fact that

subsequent to the donations involved in this case,
Congress approved Republic Act No. 7166 on
November 25, 1991, providing in Section 13 thereof
that political/electoral contributions, duly reported to
the Commission on Elections, are not subject to the
payment of any gift tax. This all the more shows that
the political contributions herein made are subject to
the payment of gift taxes, since the same were made
prior to the exempting legislation, and Republic Act
No. 7166 provides no retroactive effect on this point.

WHEREFORE, the petition is DENIED and the

assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.

No costs.

SO ORDERED.

4
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G.R. No. 210987 November 24, 2014
THE PHILIPPINE AMERICAN LIFE AND GENERAL
INSURANCE COMPANY, Petitioner,
vs.
THE SECRETARY OF FINANCE and THE
COMMISSIONER OF INTERNAL
REVENUE, Respondents.
DECISION
VELASCO, JR., J.:
Nature of the Case
Before the Court is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court assailing and
seeking the reversal of the Resolutions of the Court of
Appeals (CA) in CA-G.R. SP No. 127984, dated May
23, 20131 and January 21, 2014, which dismissed
outright the petitioner's appeal from the Secretary of
Finance's review of BIR Ruling No. 015-122 for lack of
jurisdiction.
The Facts
Petitioner The Philippine American Life and General
Insurance Company (Philamlife) used to own 498,590
Class A shares in Philam Care Health Systems, Inc.
(PhilamCare), representing 49.89% of the latter's
outstanding capital stock. In 2009, petitioner, in a bid
to divest itself of its interests in the health
maintenance organization industry, offered to sell its
shareholdings in PhilamCare through competitive
bidding. Thus, on September 24, 2009, petitioner's
Class A shares were sold for USD 2,190,000, or PhP
104,259,330 based on the prevailing exchange rate at
the time of the sale, to STI Investments, Inc., who
emerged as the highest bidder.3
After the sale was completed and the necessary
documentary stamp and capital gains taxes were
paid, Philamlife filed an application for a certificate
authorizing registration/tax clearance with the Bureau
of Internal Revenue (BIR) Large Taxpayers Service
Division to facilitate the transfer of the shares. Months
later, petitioner was informed that it needed to secure
a BIR ruling in connection with its application due to
potential donor’s tax liability. In compliance, petitioner,
on January 4, 2012, requested a ruling4 to confirm that
the sale was not subject to donor’s tax, pointing out,
in its request, the following: that the transaction
cannot attract donor’s tax liability since there was no
donative intent and,ergo, no taxable donation, citing
BIR Ruling [DA-(DT-065) 715-09] dated November
27, 2009;5 that the shares were sold at their actual fair
market value and at arm’s length; that as long as the
transaction conducted is at arm’s length––such that a
bona fide business arrangement of the dealings is
done inthe ordinary course of business––a sale for
less than an adequate consideration is not subject to
donor’s tax; and that donor’s tax does not apply to
saleof shares sold in an open bidding process.
On January 4, 2012, however, respondent
Commissioner on Internal Revenue (Commissioner)
denied Philamlife’s request through BIR Ruling No.
015-12. As determined by the Commissioner, the
selling price of the shares thus sold was lower than
5
their book value based on the financial statements of
PhilamCare as of the end of 2008.6 As such, the
Commisioner held, donor’s tax became imposable on
the price difference pursuant to Sec. 100 of the
National Internal Revenue Code (NIRC), viz:
SEC. 100. Transfer for Less Than Adequate and full
Consideration.- Where property, other than real
property referred to in Section 24(D), is transferred for
less than an adequate and full consideration in money
or money’s worth, then the amount by which the fair
market value of the property exceeded the value of
the consideration shall, for the purpose of the tax
imposed by this Chapter, be deemed a gift, and shall
be included in computing the amount of gifts made
during the calendar year.
The afore-quoted provision, the Commissioner
added, is implemented by Revenue Regulation 6-
2008 (RR 6-2008), which provides:
SEC. 7. SALE, BARTER OR EXCHANGE OF
SHARES OF STOCK NOT TRADED THROUGH A
LOCAL STOCK EXCHANGE PURSUANT TO SECS.
24(C), 25(A)(3), 25(B), 27(D)(2), 28(A)(7)(c),
28(B)(5)(c) OF THE TAX CODE, AS AMENDED. —
xxxx
(c) Determination of Amount and Recognition of Gain
or Loss –
(c.1) In the case of cash sale, the selling price shall
be the consideration per deed of sale.
xxxx
(c.1.4) In case the fair market value of the shares
of stock sold, bartered, or exchanged is greater
than the amount of money and/or fair market
value of the property received, the excess of the
fair market value of the shares of stock sold,
bartered or exchanged overthe amount of money
and the fair market value of the property, if any,
received as consideration shall be deemed a gift
subject to the donor’stax under Section 100 of the
Tax Code, as amended.
xxxx
(c.2) Definition of ‘fair market value’of Shares of
Stock. – For purposes of this Section, ‘fair market
value’ of the share of stock sold shall be:
xxxx
(c.2.2) In the case of shares of stock not listed and
traded in the local stock exchanges, the book value
of the shares of stock as shown in the financial
statements duly certified by an independent
certified public accountant nearest to the date of
sale shall be the fair market value.
In view of the foregoing, the Commissioner ruled that
the difference between the book value and the
selling price in the sales transaction is taxable
donation subject to a 30% donor’s tax under
Section 99(B) of the NIRC.7 Respondent
Commissioner likewise held that BIR Ruling [DA-(DT-
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065) 715-09], on which petitioner anchored its claim,
has already been revoked by Revenue Memorandum
Circular (RMC) No. 25-2011.8
Aggrieved, petitioner requested respondent Secretary
of Finance (Secretary) to review BIR Ruling No. 015-
12, but to no avail. For on November 26, 2012,
respondent Secretary affirmed the Commissioner’s
assailed ruling in its entirety.9
Ruling of the Court of Appeals
Not contented with the adverse results, petitioner
elevated the case to the CA via a petition for review
under Rule 43, assigning the following errors:10
A.
The Honorable Secretary of Finance gravely erred in
not finding that the application of Section 7(c.2.2)
of RR 06-08 in the Assailed Ruling and RMC 25-11
is void insofar as it alters the meaning and scope
of Section 100 of the Tax Code.
B.
The Honorable Secretary of Finance gravely erred in
finding that Section 100 of the Tax Code is applicable
tothe sale of the Sale of Shares.
1.
The Sale of Shares were sold at their fair
market value and for fair and full consideration
in money or money’s worth.
2.
The sale of the Sale Shares is a bona fide
business transaction without any donative
intent and is therefore beyond the ambit of
Section 100 of the Tax Code.
3.
It is superfluous for the BIR to require an
express provision for the exemption of the
sale of the Sale Shares from donor’s tax since
Section 100 of the Tax Code does not
explicitly subject the transaction to donor’s
tax.
C.
The Honorable Secretary of Finance gravely erred in
failing to find that in the absence of any of the
grounds mentioned in Section 246 of the Tax Code,
rules and regulations, rulings or circulars – such as
RMC 25-11 – cannot be given retroactive
application to the prejudice of Philamlife.
On May 23, 2013, the CA issued the assailed
Resolution dismissing the CA Petition, thusly:
WHEREFORE, the Petition for Review dated January
9, 2013 is DISMISSED for lack of jurisdiction.
SO ORDERED.
6
In disposing of the CA petition, the appellate court
ratiocinated that it is the Court of Tax Appeals (CTA),
pursuant to Sec. 7(a)(1) of Republic Act No. 1125 (RA
1125),11 as amended, which has jurisdiction over the
issues raised. The outright dismissal, so the CA held,
is predicated on the postulate that BIR Ruling No.
015-12 was issued in the exercise of the
Commissioner’s power to interpret the NIRC and
other tax laws. Consequently, requesting for its
review can be categorized as "other matters arising
under the NIRC or other laws administered by the
BIR," which is under the jurisdiction of the CTA, not
the CA.
Philamlife eventually sought reconsideration but the
CA, in its equally assailed January 21, 2014
Resolution, maintained its earlier position. Hence, the
instant recourse.
Issues
Stripped to the essentials, the petition raises the
following issues in both procedure and substance:
1. Whether or not the CA erred in dismissing
the CA Petition for lack of jurisdiction; and
2. Whether or not the price difference in
petitioner’s adverted sale of shares in
PhilamCare attracts donor’s tax.
Procedural Arguments
a. Petitioner’s contentions
Insisting on the propriety of the interposed CA
petition, Philamlife, while conceding that respondent
Commissioner issued BIR Ruling No. 015-12 in
accordance with her authority to interpret tax laws,
argued nonetheless that such ruling is subject to
review by the Secretary of Finance under Sec. 4 of
the NIRC, to wit:
SECTION 4. Power of the Commissioner to Interpret
Tax Laws and to Decide Tax Cases. – The power to
interpret the provisions of this Code and other tax
laws shall be under the exclusive and original
jurisdiction of the Commissioner, subject to review by
the Secretary of Finance.
The power to decide disputed assessments, refunds
of internal revenue taxes, fees or other charges,
penalties imposed in relation thereto, or other matters
arising under this Code or other laws or portions
thereof administered by the Bureau of Internal
Revenue is vested in the Commissioner, subject to
the exclusive appellate jurisdiction of the Court of Tax
Appeals. Petitioner postulates that there is a need to
differentiate the rulings promulgated by the
respondent Commissioner relating to those rendered
under the first paragraph of Sec. 4 of the NIRC, which
are appealable to the Secretary of Finance, from
those rendered under the second paragraph of Sec. 4
of the NIRC, which are subject to review on appeal
with the CTA.
This distinction, petitioner argues, is readily made
apparent by Department Order No. 7-02,12 as
circularized by RMC No. 40-A-02.
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Philamlife further averred that Sec.7 of RA 1125, as
amended, does not find application in the case at bar
since it only governs appeals from the
Commissioner’s rulings under the second paragraph
and does not encompass rulings from the Secretary
of Finance in the exercise of his power of review
under the first, as what was elevated to the CA. It
added that under RA 1125, as amended, the only
decisions of the Secretary appealable to the CTA are
those rendered in customs cases elevated to him
automatically under Section 2315 of the Tariff and
Customs Code.13
There is, thus, a gap in the law when the NIRC, as
couched, and RA 1125, as amended, failed to supply
where the rulings of the Secretary in its exercise of its
power of review under Sec. 4 of the NIRC are
appealable to. This gap, petitioner submits, was
remedied by British American Tobacco v.
Camacho14 wherein the Court ruled that where what is
assailed is the validity or constitutionality of a law, or a
rule or regulation issued by the administrative agency,
the regular courts have jurisdiction to pass upon the
same.
In sum, appeals questioning the decisions of the
Secretary of Finance in the exercise of its power of
review under Sec. 4 of the NIRC are not within the
CTA’s limited special jurisdiction and, according to
petitioner, are appealable to the CA via a Rule 43
petition for review.
b. Respondents’ contentions
Before the CA, respondents countered petitioner’s
procedural arguments by claiming that even assuming
arguendo that the CTA does not have jurisdiction over
the case, Philamlife, nevertheless,committed a fatal
error when it failed to appeal the Secretary of
Finance’s ruling to the Office of the President (OP).
As made apparent by the rules, the Department of
Finance is not among the agencies and quasi-judicial
bodies enumerated under Sec. 1, Rule 43 of the
Rules of Court whose decisions and rulings are
appealable through a petition for review.15 This is in
stark contrast to the OP’s specific mention under the
same provision, so respondents pointed out.
To further reinforce their argument, respondents cite
the President’s power of review emanating from his
power of control as enshrined under Sec. 17 of Article
VII of the Constitution, which reads:
Section 17.The President shall have control of all the
executive departments, bureaus, and offices. He shall
ensure that the laws be faithfully executed.
The nature and extent of the President’s
constitutionally granted power of control have
beendefined in a plethora of cases, most recently in
Elma v. Jacobi,16 wherein it was held that:
x x x This power of control, which even Congress
cannot limit, let alone withdraw, means the power of
the Chief Executive to review, alter, modify, nullify, or
set aside what a subordinate, e.g., members of the
Cabinet and heads of line agencies, had done in the
performance of their duties and to substitute the
judgment of the former for that of the latter.
7
In their Comment on the instant petition, however,
respondents asseverate that the CA did not err in its
holding respecting the CTA’s jurisdiction over the
controversy.
The Court’s Ruling
The petition is unmeritorious.
Reviews by the Secretary of Finance pursuant to Sec.
4 of the NIRC are appealable to the CTA
To recapitulate, three different, if not conflicting,
positions as indicated below have been advanced by
the parties and by the CA as the proper remedy open
for assailing respondents’ rulings:
1. Petitioners: The ruling of the Commissioner
is subject to review by the Secretary under
Sec. 4 of the NIRC, and that of the Secretary
to the CA via Rule 43;
2. Respondents: The ruling of the
Commissioner is subject to review by the
Secretary under Sec. 4 of the NIRC, and that
of the Secretary to the Office of the President
before appealing to the CA via a Rule 43
petition; and
3. CA: The ruling of the Commissioner is
subject to review by the CTA.
We now resolve.
Preliminarily, it bears stressing that there is no dispute
that what is involved herein is the respondent
Commissioner’s exercise of power under the first
paragraph of Sec. 4 of the NIRC––the power to
interpret tax laws. This, in fact, was recognized by the
appellate court itself, but erroneously held that her
action in the exercise of such power is appealable
directly to the CTA. As correctly pointed out by
petitioner, Sec. 4 of the NIRC readily provides that the
Commissioner’s power to interpret the provisions of
this Code and other tax laws is subject to review by
the Secretary of Finance. The issue that now arises is
this––where does one seek immediate recourse from
the adverse ruling of the Secretary of Finance in its
exercise of its power of review under Sec. 4?
Admittedly, there is no provision in law that expressly
provides where exactly the ruling of the Secretary of
Finance under the adverted NIRC provision is
appealable to. However, We find that Sec. 7(a)(1) of
RA 1125, as amended, addresses the seeming gap in
the law asit vests the CTA, albeit impliedly, with
jurisdiction over the CA petition as "other matters"
arising under the NIRC or other laws administered by
the BIR. As stated:
Sec. 7. Jurisdiction.- The CTA shall exercise:
a. Exclusive appellate jurisdiction to review by appeal,
as herein provided:
1. Decisions of the Commissioner of Internal Revenue
in cases involving disputed assessments, refunds of
internal revenue taxes, fees or other charges,
penalties in relation thereto, or other matters arising
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under the National Internal Revenue or other laws
administered by the Bureau of Internal Revenue.
(emphasis supplied)
Even though the provision suggests that it only covers
rulings of the Commissioner, We hold that it is,
nonetheless, sufficient enough to include appeals
from the Secretary’s review under Sec. 4 of the NIRC.
It is axiomatic that laws should be given a reasonable
interpretation which does not defeat the very purpose
for which they were passed.17 Courts should not follow
the letter of a statute when to do so would depart from
the true intent of the legislature or would otherwise
yield conclusions inconsistent with the purpose of the
act.18 This Court has, in many cases involving the
construction of statutes, cautioned against narrowly
interpreting a statute as to defeat the purpose of the
legislator, and rejected the literal interpretation of
statutes if todo so would lead to unjust or absurd
results.19
Indeed, to leave undetermined the mode of appeal
from the Secretary of Finance would be an injustice to
taxpayers prejudiced by his adverse rulings. To
remedy this situation, Weimply from the purpose of
RA 1125 and its amendatory laws that the CTA is the
proper forum with which to institute the appeal. This is
not, and should not, in any way, be taken as a
derogation of the power of the Office of President but
merely as recognition that matters calling for technical
knowledge should be handled by the agency or quasi-
judicial body with specialization over the controversy.
As the specialized quasi-judicial agency mandated to
adjudicate tax, customs, and assessment cases,
there can be no other court of appellate jurisdiction
that can decide the issues raised inthe CA petition,
which involves the tax treatment of the shares of
stocks sold. Petitioner, though, nextinvites attention to
the ruling in Ursal v. Court of Tax Appeals20 to argue
against granting the CTA jurisdiction by implication,
viz:
Republic Act No. 1125 creating the Court of Tax
Appeals did not grant it blanket authority to decide
any and all tax disputes. Defining such special court’s
jurisdiction, the Act necessarily limited its authority to
those matters enumerated therein. Inline with this
idea we recently approved said court’s order rejecting
an appeal to it by Lopez & Sons from the decision of
the Collector ofCustoms, because in our opinion its
jurisdiction extended only to a review of the decisions
of the Commissioner of Customs, as provided bythe
statute — and not to decisions of the Collector of
Customs. (Lopez & Sons vs. The Court of Tax
Appeals, 100 Phil., 850, 53 Off. Gaz., [10] 3065).
xxxx
x x x Republic Act No. 1125 is a complete law by itself
and expressly enumerates the matters which the
Court of Tax Appeals may consider; such
enumeration excludes all others by implication.
Expressio unius est exclusio alterius.
Petitioner’s contention is untenable. Lest the ruling in
Ursalbe taken out of context, but worse as a
precedent, it must be noted that the primary reason
for the dismissal of the said case was that the
petitioner therein lacked the personality to file the suit
8
with the CTA because he was not adversely affected
by a decision or ruling of the Collector of Internal
Revenue, as was required under Sec. 11 of RA
1125.21 As held:
We share the view that the assessor had no
personality to resort to the Court of Tax Appeals. The
rulings of the Board of Assessment Appeals did not
"adversely affect" him. At most it was the City of Cebu
that had been adversely affected in the sense that it
could not thereafter collect higher realty taxes from
the abovementioned property owners. His opinion, it
is true had been overruled; but the overruling inflicted
no material damage upon him or his office. And the
Court of Tax Appeals was not created to decide mere
conflicts of opinion between administrative officers or
agencies. Imagine an income tax examiner resorting
to the Court of Tax Appeals whenever the Collector of
Internal Revenue modifies, or lower his assessment
on the return of a tax payer! 22
The appellate power of the CTA includes certiorari
Petitioner is quick to point out, however, that the
grounds raised in its CA petition included the nullity of
Section 7(c.2.2) of RR 06-08 and RMC 25-11. In an
attempt to divest the CTA jurisdiction over the
controversy, petitioner then cites British American
Tobacco, wherein this Court has expounded on the
limited jurisdiction of the CTA in the following wise:
While the above statute confers on the CTA
jurisdiction to resolve tax disputes in general, this
does not include cases where the constitutionality of a
law or rule is challenged. Where what is assailed is
the validity or constitutionality of a law, or a rule or
regulation issued by the administrative agency in the
performance of its quasi legislative function, the
regular courts have jurisdiction to pass upon the
same. The determination of whether a specific rule or
set of rules issued by an administrative agency
contravenes the law or the constitution is within the
jurisdiction of the regular courts. Indeed, the
Constitution vests the power of judicial review or the
power to declare a law, treaty, international or
executive agreement, presidential decree, order,
instruction, ordinance, or regulation inthe courts,
including the regional trial courts. This is within the
scope of judicial power, which includes the authority
of the courts to determine inan appropriate action the
validity of the acts of the political departments.
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to
determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.23
Vis-a-vis British American Tobacco, it bears to stress
what appears to be a contrasting ruling in Asia
International Auctioneers, Inc. v. Parayno, Jr., to wit:
Similarly, in CIR v. Leal, pursuant to Section 116 of
Presidential Decree No. 1158 (The National Internal
Revenue Code, as amended) which states that
"[d]ealers in securities shall pay a tax equivalent to six
(6%) per centum of their gross income. Lending
investors shall pay a tax equivalent to five (5%) per
cent, of their gross income," the CIR issued Revenue
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Memorandum Order (RMO) No. 15-91 imposing 5%
lending investor’s tax on pawnshops based on their
gross income and requiring all investigating units of
the BIR to investigate and assess the lending
investor’s tax due from them. The issuance of RMO
No. 15-91 was an offshoot of the CIR’s finding that
the pawnshop business is akin to that of "lending
investors" as defined in Section 157(u) of the Tax
Code. Subsequently, the CIR issued RMC No. 43-91
subjecting pawn tickets to documentary stamp tax.
Respondent therein, Josefina Leal, owner and
operator of Josefina’s Pawnshop, asked for a
reconsideration of both RMO No. 15-91 and RMC No.
43-91, but the same was denied by petitioner CIR.
Leal then filed a petition for prohibition with the RTC
of San Mateo, Rizal, seeking to prohibit petitioner CIR
from implementing the revenue orders. The CIR,
through the OSG, filed a motion to dismiss on the
ground of lack of jurisdiction. The RTC denied the
motion. Petitioner filed a petition for certiorari and
prohibition with the CA which dismissed the petition
"for lack of basis." In reversing the CA, dissolving the
Writ of Preliminary Injunction issued by the trial court
and ordering the dismissal of the case before the trial
court, the Supreme Court held that "[t]he questioned
RMO No. 15-91 and RMC No. 43-91 are actually
rulings or opinions of the Commissioner implementing
the Tax Code on the taxability of pawnshops." They
were issued pursuant to the CIR’s power under
Section 245 of the Tax Code "to make rulings or
opinions in connection with the implementation of the
provisions of internal revenue laws, including ruling on
the classification of articles of sales and similar
purposes."The Court held that under R.A. No. 1125
(An Act Creating the Court of Tax Appeals), as
amended, such rulings of the CIR are appealable to
the CTA.
In the case at bar, the assailed revenue regulations
and revenue memorandum circulars are actually
rulings or opinions of the CIR on the tax treatment of
motor vehicles sold at public auction within the SSEZ
to implement Section 12 of R.A. No. 7227 which
provides that "exportation or removal of goods from
the territory of the [SSEZ] to the other parts of the
Philippine territory shall be subject to customs duties
and taxes under the Customs and Tariff Codeand
other relevant tax laws of the Philippines." They were
issued pursuant to the power of the CIR under
Section 4 of the National Internal Revenue Code x x
x.24 (emphasis added)
The respective teachings in British American Tobacco
and Asia International Auctioneers, at first blush,
appear to bear no conflict––that when the validity or
constitutionality of an administrative rule or regulation
is assailed, the regular courts have jurisdiction; and if
what is assailed are rulings or opinions of the
Commissioner on tax treatments, jurisdiction over the
controversy is lodged with the CTA. The problem with
the above postulates, however, is that they failed to
take into consideration one crucial point––a taxpayer
can raise both issues simultaneously.
Petitioner avers that there is now a trend wherein both
the CTA and the CA disclaim jurisdiction over tax
cases: on the one hand, mere prayer for the
declaration of a tax measure’s unconstitutionality or
invalidity before the CTA can result in a petition’s
outright dismissal, and on the other hand, the CA will
9
likewise dismiss the same petition should it find that
the primary issue is not the tax measure’s validity but
the assessment or taxability of the transaction or
subject involved. To illustrate this point, petitioner
cites the assailed Resolution, thusly: Admittedly, in
British American Tobacco vs. Camacho, the Supreme
Court has ruled that the determination of whether a
specific rule or set of rules issued by an administrative
agency contravenes the law or the constitution is
within the jurisdiction of the regular courts, not the
CTA.
xxxx
Petitioner essentially questions the CIR’s ruling that
Petitioner’s sale of shares is a taxable donation under
Sec. 100 of the NIRC. The validity of Sec. 100 of the
NIRC, Sec. 7 (C.2.2) and RMC 25-11 is merely
questioned incidentally since it was used by the CIR
as bases for its unfavourable opinion. Clearly, the
Petition involves an issue on the taxability of the
transaction rather than a direct attack on the
constitutionality of Sec. 100, Sec.7 (c.2.2.) of RR
06-08 and RMC 25-11. Thus, the instant Petition
properly pertains to the CTA under Sec. 7 of RA
9282.
As a result of the seemingly conflicting
pronouncements, petitioner submits that taxpayers
are now at a quandary on what mode of appeal
should be taken, to which court or agency it should be
filed, and which case law should be followed.
Petitioner’s above submission is specious.
In the recent case of City of Manila v. Grecia-
Cuerdo,25 the Court en banc has ruled that the CTA
now has the power of certiorari in cases within its
appellate jurisdiction. To elucidate:
The prevailing doctrine is that the authority to issue
writs of certiorari involves the exercise of original
jurisdiction which must be expressly conferred by the
Constitution or by law and cannot be implied from the
mere existence of appellate jurisdiction. Thus, x x x
this Court has ruled against the jurisdiction of courts
or tribunals over petitions for certiorari on the ground
that there is no law which expressly gives these
tribunals such power. Itmust be observed, however,
that x x x these rulings pertain not to regular courts
but to tribunals exercising quasijudicial powers. With
respect tothe Sandiganbayan, Republic Act No. 8249
now provides that the special criminal court has
exclusive original jurisdiction over petitions for the
issuance of the writs of mandamus, prohibition,
certiorari, habeas corpus, injunctions, and other
ancillary writs and processes in aid of its appellate
jurisdiction.
In the same manner, Section 5 (1), Article VIII of the
1987 Constitution grants power to the Supreme Court,
in the exercise of its original jurisdiction, to issue writs
of certiorari, prohibition and mandamus. With respect
to the Court of Appeals, Section 9 (1) of Batas
Pambansa Blg. 129 (BP 129) gives the appellate
court, also in the exercise of its original jurisdiction,
the power to issue, among others, a writ of certiorari,
whether or not in aid of its appellate jurisdiction. As to
Regional Trial Courts, the power to issue a writ of
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certiorari, in the exercise of their original jurisdiction, consideration shall be deemed a gift. Thus, even if
1âwphi 1

is provided under Section 21 of BP 129.
The foregoing notwithstanding, while there is no
express grant of such power, with respect to the CTA,
Section 1, Article VIII of the 1987 Constitution
provides, nonetheless, that judicial power shall be
vested in one Supreme Court and in such lower
courts as may be established by law and that judicial
power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable, and to
determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.
On the strength of the above constitutional provisions,
it can be fairly interpreted that the power of the CTA
includes that of determining whether or not there has
been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC in issuing
an interlocutory order in cases falling within the
exclusive appellate jurisdiction of the tax court. It,
thus, follows that the CTA, by constitutional mandate,
is vested with jurisdiction to issue writs of certiorari in
these cases.
Indeed, in order for any appellate court to effectively
exercise its appellate jurisdiction, it must have the
authority to issue, among others, a writ of certiorari. In
transferring exclusive jurisdiction over appealed tax
cases to the CTA, it can reasonably be assumed that
the law intended to transfer also such power as is
deemed necessary, if not indispensable, in aid of
such appellate jurisdiction. There is no perceivable
reason why the transfer should only be considered as
partial, not total. (emphasis added)
there is no actual donation, the difference in price is
considered a donation by fiction of law.
Moreover, Sec. 7(c.2.2) of RR 06-08 does not alter
Sec. 100 of the NIRC but merely sets the parameters
for determining the "fair market value" of a sale of
stocks. Such issuance was made pursuant to the
Commissioner's power to interpret tax laws and to
promulgate rules and regulations for their
implementation.
Lastly, petitioner is mistaken in stating that RMC 25-
11, having been issued after the sale, was being
applied retroactively in contravention to Sec. 246 of
the NIRC.26 Instead, it merely called for the strict
application of Sec. 100, which was already in force
the moment the NIRC was enacted.
WHEREFORE, the petition is hereby DISMISSED.
The Resolutions of the Court of Appeals in CA-G.R.
SP No. 127984 dated May 23, 2013 and January 21,
2014 are hereby AFFIRMED.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
DIOSDADO M. PERALTA
Associate Justice
MARTIN S. JOSE CATRAL
VILLARAMA, JR. MENDOZA*
Associate Justice Associate Justice

Evidently, City of Manilacan be considered as a

departure from Ursal in that in spite of there being no
MARVIC MARIO VICTOR F. LEONEN**
express grant in law, the CTA is deemed granted with
Associate Justice
powers of certiorari by implication. Moreover, City of
Manila diametrically opposes British American
Tobacco to the effect that it is now within the power of ATTESTATION
the CTA, through its power of certiorari, to rule on the
validity of a particular administrative ruleor regulation I attest that the conclusions in the above Decision had
so long as it is within its appellate jurisdiction. Hence, been reached in consultation before the case was
it can now rule not only on the propriety of an assigned to the writer of the opinion of the Court's
assessment or tax treatment of a certain transaction, Division.
but also on the validity of the revenue regulation or
revenue memorandum circular on which the said PRESBITERO J. VELASCO, JR.
assessment is based. Associate Justice
Chairperson
Guided by the doctrinal teaching in resolving the case
at bar, the fact that the CA petition not only contested CERTIFICATION
the applicability of Sec. 100 of the NIRC over the
sales transaction but likewise questioned the validity Pursuant to Section 13, Article VIII of the Constitution
of Sec. 7 (c.2.2) of RR 06-08 and RMC 25-11 does and the Division Chairperson's Attestation, I certify
not divest the CTA of its jurisdiction over the that the conclusions in the above Decision had been
controversy, contrary to petitioner's arguments. reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.
The price difference is subject to donor's tax
MARIA LOURDES P.A. SERENO
Petitioner's substantive arguments are unavailing. Chief Justice
The absence of donative intent, if that be the case,
does not exempt the sales of stock transaction from
donor's tax since Sec. 100 of the NIRC categorically
states that the amount by which the fair market value
of the property exceeded the value of the
10
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Footnotes Internal Revenue Code of 1997,

Repealing for this Purpose
* Acting member per Special Order No. 1878 Department Order No. 005-99 and
dated November 21, 2014. Revenue Administrative Order No. 1-
99.
** Additional member per raffle dated
September 24, 2014. WHEREAS, Section 4 of Republic Act
No. 8424 (the National Internal
1
Penned by Associate Justice Noel G. Tijam Revenue Code of 1997, ‘the NIRC’ for
and concurred in by Associate Justices brevity) vests with the Commissioner
Romeo F. Barza and Ramon A. Cruz. of Internal Revenue exclusive and
original jurisdiction to interpret its
provisions and other tax laws, subject
2
Rollo, pp. 189-193.
to review by the Secretary of Finance;
3
Id. at 6-7.
xxxx
4
Id. at 94-99.
WHEREAS, there is a need to further
provide for the implementing rules of
5
"The legislative intendment of the deemed the first paragraph of
gift provision under Section 100 of the Tax
Code is to discourage the parties to a sale
Section 4 of the NIRC.
from manipulating their selling price in order to
save on income taxes. This is because under
the Tax Code, the measurement of gain from xxxx
a disposition of property merely considers the
amount realized from the sale, which is the Section 1. Scope of this Order. – This
selling price minus the basis of the property Department Order shall apply to all
sold. Hence, if the parties would declare a rulings of the Bureau of Internal
lower selling price per document of sale than Revenue (BIR) that implement the
the actual amount of money which changed provisions of the NIRC and other tax
hands, there is foregone revenue and the laws.
government is placed at a very
disadvantageous position." Section 2. Validity of Rulings. – A
ruling by the Commissioner of Internal
6
Rollo, p. 190. Revenue shall be presumed valid until
overturned or modified by the
7
NIRC, Sec. 99(B): Tax Payable by Donor if Secretary of Finance.
Donee is a Stranger. - When the donee or
beneficiary is stranger, the tax payable by the Section 3. Rulings adverse to the
donor shall be thirty percent (30%) of the net taxpayer. – A taxpayer who receives
gifts. For the purpose of this tax, a "stranger", an adverse ruling from the
is a person who is not a: Commissioner of Internal Revenue
may, within thirty (30) days from the
(1) Brother, sister (whether by whole date of receipt of such ruling, seek its
or half-blood), spouse, ancestor and review by the Secretary of Finance. x
lineal descendant; or xx

(2) Relative by consanguinity in the

13
Sec. 7(a)(6), RA 1125, as amended:
collateral line within the fourth degree
of relationship. Sec. 7. Jurisdiction.- The CTA shall
exercise:
8
"It is noteworthy to state that the above
provision (Section 100 of the Tax Code) does a. Exclusive appellate jurisdiction to
not mention of any exempt transaction. The review by appeal, as herein provided:
above provision is clear and free from any
doubt and/or ambiguity. Hence, there is no x x x x 6. Decisions of the Secretary of
room for interpretation. There is only room for Finance on customs cases elevated to
application." him automatically for review from
decisions of the Commissioner of
9
Rollo, pp. 91-93. Customs which are adverse to the
Government under Section 2315 of
10
Id. at 71-72. the Tariff and Customs Code.

11
An Act Creating the Court of Tax Appeals. G.R. No. 163583, August 20, 2008, 562
14

SCRA 511.
12
Providing for the Implementing Rules of the
First Paragraph of Section 4 of the National Section 1. Scope. — This Rule shall apply to
15

appeals from judgments or final orders of the

11
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Court of Tax Appeals and from awards, (a) Where the taxpayer deliberately
judgments, final orders or resolutions of or misstates or omits material facts from
authorized by any quasi-judicial agency in the his return or any document required of
exercise of its quasi-judicial functions. Among him by the Bureau of Jnternal
these agencies are the Civil Service Revenue;
Commission, Central Board of Assessment
Appeals, Securities and Exchange (b) Where the facts subsequently
Commission, Office of the President, Land gathered by the Bureau of Internal
Registration Authority, Social Security Revenue are materially different from
Commission, Civil Aeronautics Board, Bureau the facts on which the ruling is based;
of Patents, Trademarks and Technology or
Transfer, National Electrification
Administration, Energy Regulatory Board, (c) Where the taxpayer acted in bad
National Telecommunications Commission, faith.
Department of Agrarian Reform under
Republic Act No. 6657, Government Service
Insurance System, Employees Compensation
Commission, Agricultural Invention Board,
Insurance Commission, Philippine Atomic
Energy Commission, Board of Investments,
Construction Industry Arbitration Commission,
and voluntary arbitrators authorized by law.

G.R. No. 155996, June 27, 2012, 675 SCRA

16

20.

Municipality of Nueva Era, Ilocos Norte v.

17

Municipality of Marcos, Ilocos Norte, G.R. No.

169435, February 27, 2008, 547 SCRA 71.

Torres v. Limjap, 56 Phil. 141 (1931); citing

18

Vol. II Sutherland, Statutory Construction, pp.

693-695.

The Secretary of Justice v. Koruga, G.R. No.

19

166199, April 24, 2009, 582 SCRA 513.

20
101 Phil. 209 (1957).

21
SEC. 11. Who may appeal; effect of appeal.
— Any person, association or corporation
adversely affected by a decision or ruling of
the Collector of Internal Revenue, the
Collector of Customs or any provincial or city
Board of Assessment Appeals may file an
appeal in the Court of Tax Appeals within
thirty days after the receipt of such decision or
ruling.

Ursal v. Court of Tax Appeals, supra note

22

20.

23
Supra note 14, at 534.

G.R. No. 163445, December 18, 2007, 540

24

SCRA 536, 549-551.

25
G.R. No. 175723, February 4, 2014.

26
EC. 246. Non-Retroactivity of Rulings. - Any
revocation, modification or reversal of any of
the rules and regulations promulgated in
accordance with the preceding Sections or
any of the rulings or circulars promulgated by
the Commissioner shall not be given
retroactive application if the revocation,
modification or reversal will be prejudicial to
the taxpayers, except in the following cases:

12