Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS M a n i l a

LUNG CENTER OF THE PHILIPPINES, CBAA Case No. L-13-94 Petitioner-Appellant,

– versus –

BOARD OF ASSESSMENT APPEALS OF QUEZON CITY,
Appellee,

– and –

CONSTANTINO P. ROSAS, in his capacity as CITY ASSESSOR OF QUEZON CITY,
Respondent-Appellee. x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

This is an appeal from the decision of the Board of Assessment Appeals

of Quezon City, Appellee, against the claim for real property tax exemption of

Petitioner-Appellant, Lung Center of the Philippines.

It appears that a Notice of Assessment, dated June 7, 1993, was issued

by Respondent-Appellee, Constantino P. Rosas, City Assessor of Quezon City,

for real property taxes on the premises of the Lung Center of the Philippines

located at Quezon Boulevard, Quezon City, which Petitioner-Appellant claims

as tax-exempt under Section 28(3), Article VI of the 1987 Constitution of the

Philippines quoted hereunder as follows:

“(3) Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non profit cemeteries, and all lands, buildings, and improvements, actually, directly, and exclusively used for religious, charitable or educational purposes shall be exempt from taxation.”

Denied by Respondent-Appellee City Assessor of Quezon City, the case

was appealed to Appellee Local Board of Quezon City which resolved the case

thus:

“WHEREFORE, the Board funds and so declares that Petitioner-Appellant does not fall under the category of a charitable institution and, therefore, is under obligation to pay real taxes (sic) for its buildings and premises.”

Reference: Book VIII, pp. 156-159

This same conclusion can be deduced from the records of the case and

from the hearings conducted by this Board. It can be ascertained that the herein

Petitioner-Appellant, undoubtedly, failed to show this Board that the Lung

Center of the Philippines was duly established as a charitable institution by

virtue of P.D. No. 1823, the law creating the aforementioned institution, and that

the same does not explicitly state that the said entity is exempt from the

payment of real property taxes. The relevant provisions of Section 2 of the

abovecited law so reads:

“TAX EXEMPTIONS AND PRIVILEGES. Being a non-profit, non-stock corporation organized primarily to help combat the high incidence of lung and pulmonary diseases in the Philippines, all donations, contributions, endowments and equipment and supplies to be imported by authorized entities or persons and by the Board of Trustees of the Lung Center of the Philippines, Inc. for the actual use and benefit of Lung Center, shall be exempt from income and gift taxes, the same further deductible in full for the purpose of determining the maximum deductible amount under Section 30 paragraph (h) of the National Internal Revenue Code, as amended.

x x x x x x x”

Contrary to its allegations that it is functioning for charitable purposes

only, pertinent documents proved otherwise, that its premises/real properties

which they claimed for exemption are not actually, directly and exclusively used

for such purposes as contemplated in the fundamental law of the land and that

only a small portion is, indeed, devoted to the service of charity patients as

manifested in the income statements submitted on record with this Board.

Financial Statements of the Lung Center of the Philippines from 1991 to 1994

show that they have been receiving an annual subsidy from the government

which are being spent by the institution for its free or charitable services.

Moreover, it can be gleaned from the figures stated therein that the government

far exceeds the amount spent for quantified free services and that the

remainder of the subsidy goes to the Center for its own benefit. If that is the

case, the fees and other charges being collected by the said hospital from its

patients partake of the nature of an income, hence, herein petitioner-appellant

is an income-generating institution. The findings of the Board below are

factually accurate and deemed adopted by this Board en toto.

Reference: Book VIII, pp. 156-159

WHEREFORE, it is hereby resolved that the Lung Center of the

Philippines at Quezon Blvd., Quezon City, not being a charitable institution, be

subjected to assessment for real property taxes.

SO ORDERED.

April 24, 1998, Manila, Philippines.

(Signed) MARGARITA G. MAGISTRADO
Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) BENJAMIN M. KASALA
Member

Reference: Book VIII, pp. 156-159