October 14, 1998
Ponente: Panganiban, J.
FACTS
Young Men’s Christian Association of the Philippines (YMCA) is a non-stock, non-profit institution, which conducts various programs and activities that are beneficial to the public, especially the young people, pursuant to its religious, educational and charitable objectives. In 1980, YMCA earned, among others, an income from leasing out a portion of its premises to small shop owners, like restaurants and canteen operators, and from parking fees collected from non-members.
In July 1984, the CIR issued an assessment toYMCA, in the total amount of P415,615.01 including surcharge and interest, for deficiency income tax, deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. Both CTA and CA ruled that it is reasonably necessary for YMCA to make the most out of its existing facilities to earn some income; further stating that the rental from small shops and parking fees do not result in the loss of the exemption under Sec. 27 of the NIRC.
RULING
SC held for the CIR.
A claim of statutory exemption from taxation should be manifest. and unmistakable from the language of the law on which it is based. In the instant case, the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations from any of their properties, real or personal, be subject to the tax imposed by the same Code.
Because the last paragraph of said section unequivocally subjects to tax the rent income of the YMCA from its real property, the Court is duty-bound to abide strictly by its literal meaning and to refrain from resorting to any convoluted attempt at construction.