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CIR vs. de La Salle University November 9, 2016 G.R. No. 196596

The Supreme Court ruled in favor of De La Salle University (DLSU), confirming that its income and revenues are tax-exempt as they are used actually, directly, and exclusively for educational purposes. The court emphasized that the constitutional provision does not require the revenues to be sourced from educational activities. DLSU successfully demonstrated that its financial activities met the criteria for tax exemption under Article XIV, Section 4 (3).

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10 views1 page

CIR vs. de La Salle University November 9, 2016 G.R. No. 196596

The Supreme Court ruled in favor of De La Salle University (DLSU), confirming that its income and revenues are tax-exempt as they are used actually, directly, and exclusively for educational purposes. The court emphasized that the constitutional provision does not require the revenues to be sourced from educational activities. DLSU successfully demonstrated that its financial activities met the criteria for tax exemption under Article XIV, Section 4 (3).

Uploaded by

Emcee AFP
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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[Danilo B Policarpio Jr.

] Constitutional Law 2
JD 1.5 A

[CIR vs. De La Salle University]


[G.R. No. 196596, b November 9, 2016]

Doctrine: The very foundation of the right to exercise eminent domain is a genuine necessity,
and that necessity must be of a public character. The ascertainment of the necessity must
precede or accompany, and not follow, the taking of the land.

Facts: De La Salle University, Inc. (DLSU), a non-stock, non-profit educational institution, faced
tax assessments from the Bureau of Internal Revenue (BIR) for allegedly owed deficiency
income tax, value-added tax (VAT), and documentary stamp tax (DST) for fiscal years 2001,
2002, and 2003. The assessments were based on rental earnings from campus-based
commercial establishments and certain loan and lease contracts. DLSU contested these
assessments, invoking its constitutional exemption from taxes and duties for revenues and
assets used directly, actually, and exclusively for educational purposes. The case went through
various levels of tax adjudication, eventually reaching the Supreme Court.

Issue: Whether DLSU' s income and revenues are tax-exempt to have been used actually,
directly and exclusively for educational purposes are exempt from duties and taxes.

Ruling: Yes. DLSU is a non-stock, non-profit educational institution; and (2) the income it seeks
to be exempted from taxation is used actually, directly and exclusively for educational
purposes.

The requisites for availing the tax exemption under Article XIV, Section 4 (3), namely: (1) the
taxpayer falls under the classification non-stock, non-profit educational institution; and (2) the
income it seeks to be exempted from taxation is used actually, directly and exclusively for
educational purposes.

Further, a plain reading of the Constitution would show that Article XIV, Section 4 (3) does not
require that the revenues and income must have also been sourced from educational activities
or activities related to the purposes of an educational institution. The phrase all revenues is
unqualified by any reference to the source of revenues. Thus, so long as the revenues and
income are used actually, directly and exclusively for educational purposes, then said revenues
and income shall be exempt from taxes and duties.

In the present case, DLSU factually proved that the income and revenues have been used
actually, directly and exclusively for educational purposes are exempt from duties and taxes.

Therefore, DLSU' s income and revenues are tax-exempt to have been used actually, directly
and exclusively for educational purposes are exempt from duties and taxes.

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