Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83027:57008&catid=1584&Itemid=566
Timestamp: 2019-04-19 22:14:00+00:00

Document:
G.R. No. 197192, June 04, 2014 - COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. THE INSULAR LIFE ASSURANCE CO. LTD., Respondent.
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. THE INSULAR LIFE ASSURANCE CO. LTD., Respondent.
This is a Petition for Review on Certiorari2 under Rule 45 of the Rules of Court filed by the Commissioner of Internal Revenue (petitioner) against The Insular Life Assurance Co., Ltd. (respondent), challenging the Decision3 dated March 14, 2011 and Resolution4 dated June 13, 2011 of the Court of Tax Appeals (CTA) en banc in CTA EB Case No. 585 (CTA Case No. 7292).
Petitioner Commissioner of Internal Revenue is the official duly authorized under Section 4 of the National Internal Revenue Code (NIRC) of 1997, as amended, to assess and collect internal revenue taxes, as well as the power to decide disputed assessments, subject to the exclusive appellate jurisdiction of this Court.
Respondent The Insular Life Assurance, Co., Ltd. is a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with principal office located at IL Corporate Center, Insular Life Drive, Filinvest Corporate City, Alabang, Muntinlupa City. It is registered as a non-stock mutual life insurer with the Securities and Exchange Commission.
Thereafter, respondent filed its Protest Letter on November 4, 2004, which was subsequently denied by petitioner in a Final Decision, on Disputed Assessment dated April 15, 2005 for lack of factual and legal bases. Apparently, respondent received the aforesaid Final Decision on Disputed Assessment only on June 23, 2005.
On July 15, 2005, respondent filed a Petition for Review before [the CTA].
On April 21, 2009, the former Second Division of the [CTA] rendered a Decision in favor of respondent, thus, granting the Petition for Review and held, among others, that respondent sufficiently established that it is a cooperative company and therefore, it is exempt from the DST on the insurance policies it grants to its members.
Consequently, on May 13, 2009, petitioner filed a Motion for Reconsideration.
On January 11, 2010, petitioner received a Resolution dated January 4, 2010 of the former Second Division of [the CTA] denying [its] Motion for Reconsideration for lack of merit. It held, among others, that the Supreme Court in Republic of the Philippines vs. Sunlife Assurance Company of Canada already laid down the rule that registration with the Cooperative Development Authority is not essential before respondent may avail of the exemptions granted under Section 199 of the 1997 NIRC, as amended.
WHEREFORE, the instant Petition for Review is hereby DENIED for lack of merit. The assailed Decision dated April 21, 2009 and Resolution dated January 4, 2010 are AFFIRMED.
It is the petitioner’s contention that since the respondent is not registered with the Cooperative Development Authority (CDA), it should not be considered as a cooperative company that is entitled to the exemption provided under Section 199(a) of the National Internal Revenue Code (NIRC) of 1997.7 Thus, the instant petition.
(a) Policies of insurance or annuities made or granted by a fraternal or beneficiary society, order, association or cooperative company, operated on the lodge system or local cooperation plan and organized and conducted solely by the members thereof for the exclusive benefit of each member and not for profit.
A perusal of Section 3(e) of R.A. No. 6939 evidently shows that it is merely a statement of one of the powers exercised by CDA. Neither Section 3(e) of R.A. No. 6939 nor any other provision in the aforementioned statute imposes registration with the CDA as a condition precedent to claiming DST exemption. Even then, R.A. No. 6939 is inapplicable to the case at bar, as will be discussed shortly.
The Court presented three justifications in Sunlife why registration with the CDA is not necessary for cooperatives to claim exemption from DST.
This absence of the registration requirement under Section 199 clearly manifests the intention of the Legislative branch of the government to do away with registration before the CDA for a cooperative to benefit from the DST exemption under this particular section.
When the Cooperative Code was enacted years later, all cooperatives that were registered under PD 175 and previous laws were also deemed registered with the CDA. Since respondent was not required to be registered under the old law on cooperatives, it followed that it was not required to be registered even under the new law.
There being no cogent reason for the Court to deviate from its ruling in Sunlife, the Court holds that the respondent, being a cooperative company not mandated by law to be registered with the CDA, cannot be required under RMC No. 48-91, a mere circular, to be registered prior to availing of DST exemption.
WHEREFORE, premises considered, the petition is DENIED. Accordingly, the Decision dated March 14, 2011 and Resolution dated June 13, 2011 of the Court of Tax Appeals en banc in CTA EB Case No. 585 (CTA Case No. 7292) are hereby AFFIRMED.
1Chinese Young Men’s Christian Association of the Philippine Islands v. Remington Steel Corporation, 573 Phil. 320, 337 (2008), citing Ty v. Banco Filipino Savings & Mortgage Bank, 511 Phil. 510, 520-521 (2005).
3 Penned by Associate Justice Cielito N. Mindaro-Grulla, with Presiding Justice Ernesto D. Acosta, Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Fabon-Victorino and Amelia R. Cotangco-Manalastas, concurring; id. at 33-52.
9 509 Phil. 707 (2005).
17Republic of the Philippines v. Sunlife Assurance Company of Canada, supra note 9.
19Republic of the Philippines v. Sunlife Assurance Company of Canada, supra note 9, at 724.
20 Strengthening The Cooperative Movement (April 14, 1973).
21 Supra note 9, at 725.
25Fort Bonifacio Development Corporation v. Commissioner of Internal Revenue, G.R. No. 158885, October 2, 2009, 602 SCRA 159, 167.

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