Court of Tax Appeals
0P..:>\', et al. vs. Comlviissioner of INTERNAL.REVENUE
P. •. :>\'.,' !C OF Tftr: Pilll.JPi't~EI!
1 ·;I l.T f)F' TAX A PE LS
<~;iF~ON Cn'Y
RURAL BANK OF TALISAY, (CEBU) INC . ,
Petitioner ,
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COMlVIISSIONER OF INTERNAL .REVENUE,
Respondent .
C.T .A. CASE N0. 2250
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D E C I S I 0 N
Petitioner , a rural bank organi zed under
Republic Act No. 720, as amended, is seeking the
refund of the sum of ~839.64, representing the
income tax which it paid on April 15 and July 15,
1969, covering its income from July 1 to December
31, 1969.
There being no dispute as to the facts ,
the parties have agreed to submit the case for
judgment on the pleadings .
The said amount of ~839 . 64 was paid by peti-
tioner pursuant to Revenue Memorandum Circular No.
41- 68 of the Bureau of Internal Revenue wherein
it was held that all corporations previously exempt
from income tax bec~e subject to such tax .by
virtue of Section 24 (d) of the Revenue Code, as
amended by Section 1 of Republic Act No. 5431,
providing that all corporate taxpayers , other than
those exempted under Sections 24(c)(l) and 27 of
said Code, are subject to tax effective July 1 ,
1968, regardless of the provisions of existing spe-
DECISION
CTA CASE NO 2250
2 cial or general laws to the contrary. It is alleged on behalf of petitioner that ~der Republic Act No. 720, as amended, it is exempt from all taxes , and that Section 24(d) of the Revenue Code, as amended by Secti6n 1 of Republic Act No. 5431, which ~rovides for the tax- . ability of previously exempt corporations , did not repeal its exemption under its charter .
Even as•
suming that its exemption has been repealed by Republic Act No. 5431, it is contended that its taxability should commence from January 1, 1969 and not from July 1, 1968, in view of Section 10 of said Act which provides & •sec . 10.
The provisions of this Act shall apply to income for taxable years beginning after June 30, 1968 . ~ There is no question that petitioner, as a rural bank, is keeping its books of account on the calendar year basis, so that the beginning of its taxable year is January 1 ending on December 31 each year. Therefore, the beginning of its taxable year after June 30, 1968, is January 1, 1969, and it was error for it to have been required to pay income tax on its income for the period from July 1 to December 31, 1968, because of its exemption under its charter. (Rural Bank of Camiling, Inc. v. Commissioner of Internal Revenue, C. T.A. No. ·2o41, March 1, 1974, cert. denied in G. R. No. L-38476, May 10, 1974; see also The Manila Times Publishing Co. , Inc . v. Commissioner
DECISION -
CTA CASE NO. 2250 3 of Internal Revenue, C. T. A. NO. 2053 , December 17, 1973, cert . denied in G. R. No. L-38154, May 10, 1974. )
In view of our opinion on the effectivity clause of Republic Act No. 5431, it is needless to pass upon the question whether or not said Act repealed t he exemption from taxation of petitioner under its charter (Republic Act No . 720, as amended) . At any rate, the provision exempting rural banks from taxation under their charter has been reenacted in Republic Act No. 5939, assuming that Republic Act No. 5431 repealed the prior exemption.
WHEREFORE, respondent is hereby ordered to refund to petitioner the sum of ~839 . 64 . No costs .
SO ORDERED.
Quezon City, September 24, 1974.
WE CONCUR:
~~~~ ROMAN M. UMALI
Presiding
Judge
~ · -4~£ ~ISLAO R. ALVARE~ Associate Judge pi'
h. i~-- RAMON L. AV ANCENA