Lladoc vs.

CIR

G.R. No. L-19201             June 16, 1965

Facts: 

Sometime in 1957, M.B. Estate Inc., of Bacolod City, donated 10,000.00 pesos in cash to
Fr. Crispin Ruiz, the parish priest of Victorias, Negros Occidental, and predecessor of Fr. Lladoc,
for the construction of a new Catholic church in the locality. The donated amount was spent for
such purpose.

On March 3, 1958, the donor M.B. Estate filed the donor's gift tax return. Under date of
April 29, 1960. Commissioner of Internal Revenue issued an assessment for the donee's gift tax
against the Catholic Parish of Victorias of which petitioner was the parish priest.

Issue:
Is the imposition of gift tax against the Parish priest is valid ?

Held: 
Yes, the imposition of gift tax against the Parish priest is valid.

Under Section 22 (3) Article VI of the Philippine Constitution contemplates exemption

only from payment of taxes assessed on such properties as Property taxes contra distinguished
from Excise taxes. The imposition of the gift tax on the property used for religious purpose is not
a violation of the Constitution. A gift tax is not a property by way of gift inter vivos.

In this case, the head of the Diocese and not the parish priest is the real party in interest in
the imposition of the donee's tax on the property donated to the church for religious purpose.
Head of the Diocese, herein substitute petitioner, should pay, as he is presently ordered to pay,
the said gift tax, without special, pronouncement as to costs.