SERENDRA CONDOMINIUM CORPORATION v. TAGUIG CITY GOVERNMENT, HON. MA. LAARNI CAYETANO, in her capacity as the Mayor of the City of Taguig, and ATTY. J. VOLTAIRE ENRIQUEZ, in his capacity as the Officer-in-Charge, City Treasurer of Taguig City Government

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SECOND DIVISION SERENDRA CONDOMINIUM CTAACN0.302 CORPORATION, Members: Petitioner, RINGPIS-LIBAN, ChaitperJon, - versus - MODESTO-SAN PEDRO, and FERRER-FLORES, Jl. TAGUIG CITY GOVERNMENT, HON. MA. LAARNI CAYETANO, in her capacity as the Mayor of the City ofTaguig, andATTY.J. VOLTAIRE ENRIQUEZ, in his capacity as the Officer-in-Charge, City Treasurer Promulgated: ofTaguig City Government, ReJpondent. Jlf~f,. x---------------------------------------------------------------------)~------------------------x DECISION RINGPIS-LIBAN, J.: Before this Court is an Amended Petition for Review filed by pet1t1oner Screndra Condominium Corporation, praying that this Court render judgment reversing the J udgmcnt dated 16 June 2023 1 and the Order dated 10 July 2023,2 both issued by the Regional Trial Court of Taguig City, Branch 271 (RTC), in Civil Case No. 474-TC, entitled "Serendra Condominium Corporation v. Taguig City GotJemmelll, Hon. 1\ia. Laami C{ryetano, in her capacity aJ the Exemtive I--Iead and A1qyor if Tat,ttig Ci(JJ, and Atty. ]. Voltaire Enrique:::_? in !JiJ capacity aJ the Officer-in- Char;ge, Ci!y TreaJurer rifTq~uig City GotJemment. "Petitioner likewise prays that the Court order respondents City Government of Taguig, Ma. Laarni Cayetano, and Atty. J. Voltaire Enriquez to refund or grant a tax credit for the illegally and erroneously collected taxes and fees in the total amount of P5,045,568.88, broken down as follows: P2,306,419.68 for service/business 1 RTC Docket (Civil Case No. 474-TG)- Vol. 4, pp. 147 to 170. 2 RTC Docket (Civil Case No. 474-TG)- Vol. 4, pp. 203 to 204.

DECISION CfA AC No. 302 P2,738,999.20 for environmental impact fees, and P150.00 for business plate/ sticker. In addition, petitioner seeks the award of P1 ,000,000.00 as attorney's fees and the payment of costs of suit. THE PARTIES Petitioner Serendra Condominium Corporation is a domestic non-stock, non-profit corporation duly organized and existing under Philippine laws, with principal office addresses at Serendra, 11 rh Avenue, Bonifacio Global City, Taguig City.3 Respondent City Government of Taguig is a local government unit. It may be served with notices and other processes of the Court through respondent i\Ia. Laarni Cayetano, its incumbent executive head and mayor, at Taguig City Hall, Gen. 1\. Luna Street, Taguig City... Respondent Ma. Laarni Cayetano is the incumbent mayor of the City of Taguig and was likewise the executive head of the city at the time of the filing of the complaint. She is being sued in her official capacity and may be served with notices and other processes of the Court at Taguig City Hall, Gen. A. Luna Street, Taguig City.5 Respondent ~\tty. J. Voltaire Enriquez is the Officer-in-Charge, City Treasurer of Taguig City. He is also being sued in his official capacity and may be served with notices and other processes of the Court at Taguig City Hall, Gen. A Luna Street, Taguig City.6 THE FACTS On 19 January 2017, respondents issued to pctltwncr a Billing Statement 7 in the amount of P5,340,048.80 in connection with the latter's application for renewal of business permit for the year 2017. Petitioner paid the said amount on 20 January 2017, as evidenced by Official Receipt No. A- 3258030. 8 Based on said receipt, the payment was broken down as follows: ~ 3 Par. 4, Amended Petition for Review, Docket, p. 169. Refer also to par. 1, Complain0 RTC Docket (Civil Case No. 474-TG) -Vol. 1, p. 4. 4 Par. 5, Amended Petition for Review, Docket, p. 169. Refer also to par. 2, Complaint, vis-a-vis par. 1.1, Answer (To Plaintiff's Complaint dated 17 January 2019), RTC Docket (Civil Case No. 474-TG) -Vol. 1, pp. 5 and 177, respectively. 5 Par. 6, Amended Petition for Review, Docket, p. 169. Refer also to par. 3, Complaint, vis-a-vis par. 1.1, Answer (To Plaintiff's Complaint dated 17 January 2019), RTC Docket (Civil Case No. 474-TG) - Vol. 1, pp. 5 and 177, respectively. 6 Par. 7, Amended Petition for Review, Docket, p. 169. Refer also to par. 4, Complaint, vis-a-vis par. 1.1, Answer (To Plaintiff's Complaint dated 17 January 2019}, RTC Docket (Civil Case No. 474-TG)- Vol. 1, pp. 5 and 177, respectively. 7 Exhibit "1", RTC Docket (Civil Case No. 474-TG)- Vol. 4, p. 44. 8 Exhibit "C ", RTC Docket (Civil Case No. 474-TG)- Vol. 3, p. 366.

DECISION CTA AC No. 302 Services (Business Tax) - P2,306,419.68; (b) Environmental Impact Fee - P2,738,999.20; (c) J\'Iayor's Pernlit - P6,000.00; (d) Sanitary Inspection Fee - P1,100.00; (e) 1\fedical/I-Iealth Fee - P10.00; (f) Building Inspection Fee - P400.00; (g) Electrical Inspection Fee - P400.00; (h) Plumbing Inspection Fee - P250.00; (i) Mechanical Inspection Fee - P500.00; (j) Fire Permit Fee - P200.00; (k) Sticker - P150.00; (1) Form Fee - P150.00; (m) Signboard Fee - P140.00; (n) Fire Code (RA 9514)- P274,829.92; and (o) Cedula (corporation) - P1 0,500.00. On 9 January 2019, petitioner sent respondents a letter dated 7 January 2019, 9 claiming refund or tax credit for allegedly erroneous and illegally collected amounts, specifically: Local Business Tax (LBT) in the amount of P2,306,419.68; F~nvironmental Impact Fee in the amount of P2,738,999.20; and Business Plate/Sticker Fcc in the amount of P150.00, for a total of P5,045,568.88. On 18 January 2019, pctltloner flied a Complaint 10 before the RTC, docketed as Civil Case No. 474, praying that judgment be rendered ordering respondents to refund or grant tax credit for the aforementioned amounts, to pay P1 ,000,000.00 as attorney's fees, and to pay the costs of suit. i\fter due proceedings and trial, the RTC rendered judgment dismissing the Complaint. Petitioner filed a J\llotion for ReconJideration 11 on 30 June 2023, which the RTC denied in its Order dated 10 July 2023. On 24 August 2023, petitioner flied its Petition for Review. In a Resolution dated 7 September 2023, 1:' the Court ordered respondents to file their Comment within ten (1 0) days from notice. Respondents filed their CommenP on 6 November 2023. On 12 December 2023, petitioner filed a Motion for Leave to File and Admit Amended Petition for Review, 1+ attaching thereto the Amended Petition for Review. 15 202( The Court granted the motion and admitted the Amended Petition for Review through a ~!inutc Resolution dated 3 Januaty 9 Exhibit "B", RTC Docket (Civil Case No. 474-TG)- Vol. 3, pp. 359 to 365. 10 RTC Docket (Civil Case No. 474-TG)- Vol. 1, pp. 1 to 17. 11 RTC Docket (Civil Case No. 474-TG)- Vol. 4, pp. 171 to 201. 12 Docket, p. 80. 13 Docket, pp. 81 to 109. 14 Docket, pp. 162 to 165. 15 Docket, pp. 167 to 215. 16 Docket, p. 253.

DECISION GA AC No. 302 In the Resolution dated 23 January 2024, 17 respondents were directed to file their comment to the Amended Petition for Revieu; within ten (1 0) days from notice. Respondents filed their Comment on 12 February 2024. 18 Thereafter, in the 1\Iinute Resolution dated 15 February 2024, 19 the parties were directed to file their respective :J\Iemoranda within thirty (30) days from notice. Pursuant to Section 5(b), Rule 6 of the Revised Rules of the Court of Tax Appeals, the Branch Clerk of Court or the Officer-in-Charge of the RTC was ordered to elevate the original records of Civil Case No. 474-TG to this Court within ten (1 0) days from notice. Petitioner flied its iVIemorandttm ~(1 on 22 March 2024, while the J\1emorandum (f'or the ReJpondentJ/1 was posted on 26 March 2024. The case was initially deemed submitted for decision on 4 April 2024.22 However, on 5 :\pril 2024, the Judicial Records Division of this Court reported that the complete original records of the case had not yet been transmitted.~3 Consequently, in a Resolution dated 29 April 2024, 21 the Court reminded the " Branch Clerk of Court or the Officer-in-Charge of the RTC to certify and transmit the original records within a non-extendible period of five (5) days from notice. In the Resolution dated 5 "\ugust 2024,~5 the Court recalled its Minute Resolution dated 4 April 2024 and again ordered the elevation of the complete records within ten (1 0) days from notice. In compliance, on 22 ~\ugust 2024, the Officer-in-Charge of RTC transmitted to this Court the entire original records of the case consisting of nine (9) folders, including one (1) folder of the Transcript of Stenographic Notes (TSN). 2 Petitioner likewise transmitted one (1) folder of the TSN dated (' 13 1\farch 2023 on 6 September 2024.27 ~Accordingly, the case was deemed submitted anew for decision on 17 September 2024. 28 r 17 Docket, pp. 255 to 256. 18 Docket, pp. 257 to 292. 19 Docket, p. 295. 20 Docket, pp. 296 to 360. 21 Docket, pp. 367 to 403. 22 Minute Resolution dated April 4, 2024, Docket, p. 407. 23 Records Verification dated April 5, 2024 issued by the Judicial Records Division of this Court, Docket, p. 408. 24 Docket, pp. 411 to 412. 25 Docket, pp. 415 to 416. 26 RTC ofTaguig City- Branch 271 Transmittaldated August 16 and 20,2024, Docket, pp. 425 to 426. 27 RTC ofTaguig City- Branch 271 Transmittal dated September 4, 2024, TSN folder dated March 13, 2023. 28 Minute Resolution dated September 17, 2024, Docket, p. 431.

DECISION CTA AC No. 302 THE ISSUES Petitioner assigns the following errors of fact and law allegedly committed by the RTC, to wit: ""\. The Court a quo gravely erred in determining that by categorizing the association dues as 'Revenue' in its 2016 Audited l::.'inancial Statement, Petitioner Serendra allegedly opened themselves to collection of business tax, despite there being no legal basis for such conclusion. Petitioner is a non- stock, non-profit corporation and association dues are collected to maintain the common areas. B. The Court a quo gravely erred in holding that Petitioner's cause of action had already prescribed since Petitioner allegedly failed to file a timely administrative claim for refund within sixty (60) days from receipt of the Billing Statement. The Billing Statement is not the 'Assessment' contemplated under the law as explained in various Supreme Court jurisprudence. Hence, Serendra's refund claim was timely flied within the required prescriptive period. C. The Court a quo gravely erred in holding that Petitioner failed to convince the Court of any factual, legal and equitable justification in awarding Attorney's Fees. Respondents are liable for "\ttorney's Fees for their baseless and unlawful impositions of millions of local business taxes to Petitioner Serendra. " 29 ARGUMENTS OF THE PARTIES Petitioner contends that the RTC gravely erred in dismissing its claim for refund of allegedly erroneously and illegally collected LBT, Environmental Impact Fee, and Business Plate/Sticker Fee. In support of its position, petitioner relics heavily on the Supreme Court's rulings in Yamane v. BA Lepanto rznt Condominium Co1poration 3u and Bureau ~~Internal Revenm v. E-Bank Tower C01p., 31 which, according to petitioner, categorically held that condominium corporations, by their nature, arc not considered as being engaged in trade or business. ~ 29 Amended Petition for Review, p. 13, Docket, p. 179. 3o G.R. No. 154993, October 25, 2005 ("Yamane''). 31 G.R. Nos. 215801 & 218924, January 15, 2020.

DECISION CTA AC No. 302 Petitioner emphasizes the following points: 1. The RTC erred in concluding that petitioner became liable for LBT simply because it categorized "association dues" as "Revenue" in its 2016 Audited l~'inancial Statement (AFS), 32 despite the absence of legal basis for such interpretation; 2. Considering petitioner's status as a domestic non-stock, non-profit corporation, the association dues and other fees it collects arc intended solely for the administration and maintenance of the common areas, and not for profit; 3. Petitioner does not fall under the definition of "contractor" as provided in the Taguig Revenue Code and is therefore not subject to LBT or the business plate/sticker fee; 4. Petitioner is not engaged in business and cannot be held liable for the L~nvironmental Impact l~'ee under Taguig City Ordinance No. 116, Series of 2008, which applies only to business entities; 5. Respondents failed to present evidence showing that petitioner was engaged in business or derived any income for calendar year 2017; 6. The RTC erred in ruling that the action had prescribed. The issuance of the Billing Statement does not constitute an assessment under the law, and thus, the date of its issuance cannot be used as the reckoning point for purposes of prescription. It added that its claim for refund was timely filed within the prescriptive period; 7. It is entitled to attorrlC\''s fees due to the baseless and unlawful imposition of millions of pesos in I .BT and fees by respondents. On the other hand, respondents argue that the RTC correctly dismissed the Complaint. They raise the following counterpoints: 1. The Billing Statement issued to petitioner constitutes an assessment under Section 195 of the Local Government Code (LGC), thereby triggering the 60-day prescriptive period for the filing of a written protest;~ 32 Exhibit "3", RTC Docket (Civil Case No. 474-TG)- Vol. 4, pp. 69 to 98.

DECISION CTA AC No. 302 2. The RTC correctly ruled that petitioner's cause of action had prescribed due to its failure to file an administrative protest within the prescribed period; 3. Yamane is not squarely applicable to the present controversy as the factual circumstances obtaining herein materially differ from those in that case; 4. Petitioner is engaged in an activity involving the sale of services for a fee and is thus liable for LBT under the Taguig Revenue Code; 5. Taguig City Ordinance No. 116, Series of 2008 1mposes the Environmental Impact Fee regardless of whether the entity is engaged in business or not; 6. Petitioner's claim for attorney's fees is unwarranted and does not fall under any of the instances enumerated under Article 2208 of the Civil Code. THE COURT'S RULING After a judicious evaluation, the Court finds that the Amended Petition for Review is partly impressed with merit. The Court shall first resolve the issue of whether the RTC gravely erred in ruling that petitioner's cause of action had already prescribed, as its resolution necessarily affects the timeliness of the filing of the Conzplaint before the RTC, and, in turn, the jurisdiction of this Court over the present case. The Billing Statement is not the "assessment" contemplated under Section 195 of the LGC. Petitioner contends that no formal assessment for L,BT was issued or received. It maintains that the Billing Statement relied upon by the RTC merely reflected a computation of estimated tax liabilities in relation to the renewal of its business permit for the year 2017. According to petitioner, the Billing Statement is not the assessment contemplated under Section 195 of the LGC. It lacks the elements of a formal assessment-there was no express demand for payment, no indication of a period within which payment should be made, and no imposition of interest or penalties. .1\foreover, no proof of receipt by petitioner is found on the face of the Billing Statement. Petitioner asserts that the sixty (60)-day period under Section 195 for the filing of a protest did no~

DECISION CTA AC No. 302 commence, and that the proper prescriptive period applicable to its claim is the two-year period under Section 196 of the LGC. Respondents counter that the Billing Statement was correctly deemed by the H.TC as an assessment, the service of which marked the beginning of the 60-day period under Section 19 5. They argue that petitioner's failure to file an administrative protest within said period rendered its claim for refund barred by prescription, thereby justifying the dismissal of the Complaint. The Court finds that Billing Statement 1s not the "assessment" contemplated under Section 195 of the LGC. In Yamane, the Supreme Court had its first occasion to squarely address the requisites of a valid "notice of assessment" within the context of local government taxation. In the course of resolving the issue of the non-liability of condominium corporations for I.BT, the Court pertinently held: "Ostensibly, the notice of assessment, which stands as the first instance the taxpayer is officially made aware of the pending tax liability, should be sufficiently informative to apprise the taxpayer the legal basis of the tax. Section 195 of the Local Government Code does not go as far as to expressly require that the notice of assessment specifically cite the provision of the ordinance involved but it does require that it state the nature of the tax, fee or charge, the amount of deficiency, surcharges, interests and penalties. In this case, the notice of assessment sent to the Corporation did state that the assessment was for business taxes, as well as the amount of the assessment. There may have been primafacie compliance with the requirement under Section 195. However in this case, the Revenue Code prm~ides multiple provisions on business taxes, and at varying rates. Hence, we could appreciate the Corporation's confusion, as expressed in its protest, as to the exact legal basis for the tax. Reference to the local tax ordinance is ,~ital, for the power of local gm"ernment units to impose local taxes is exercised through the appropriate ordinance enacted by the .wnK~tmian, and not by the Local Government Code alone. \'Vhat determines tax liability is the tax ordinance, the Local Gcwernment Code being the enabling law for the local legislative body." (Empba.ri.r and tmdenc:ori;zg .mpp!ied) !<'rom the details indicated in the Billing Statement, it is evident that the same was issued not for the purpose of assessing a deficiency in LBT, but merely to facilitate the renewal of petitioner's business permit. Particularly significant on this point is the Supreme Court's ruling in International Container Terminal S ervice.r, Im: ZJ. The City of i\!fani!a 33 where it held that alleged "assessment>" made in connection with the issuance or renewal o~ 33 G.R. No. 185622, October 17, 2018.

DECISION CTA AC No. 302 business permits cannot be considered as the notice of assessment contemplated under Section 195 of the LGC. Such documents lack any determination of deficiency, surcharges, interest, or penalties. It ruled: The 'assessments' from the fourth quarter of 1999 onwards were Municipal License Receipts; Mayor's Permit, Business Taxes, Fees & Charges Receipts; and Official Receipts issued by the Office of the City Treasurer for local business taxes, which must be paid as prerequisites for the renewal of petitioner's business permit in respondent City of Manila. While these receipts state the amount and nature of the tax assessed, they do not contain any amount of deficiency [taxes], surcharges, interests, and penalties due from petitioner. They cannot be considered the 'notice of assessment' required under Section 195 of the Local Government Code. \'Vhcn petitioner paid these taxes and flied written claims for refund before respondent City Treasurer, the subsequent denial of these claims should have prompted resort to the remedy laid down in Section 196, specifically the filing of a judicial case for the recovery of the allegedly erroneous or illegally collected tax within the two (2)-year period." (EmpbaJiJ and 1111derJcoring Jt~pp!ied; dtation omitted) The same principle applies herein. The subject Billing Statement docs not indicate any deficiency tax, surcharge, or interest. Accordingly, petitioner correctly argues that the Billing Statement does not constitute an assessment within the contemplation of Section 195 of the LGC. As such, the two-year prescriptive period under Section 196, which governs claims for refund or tax credit of erroneously or illegally collected local taxes, properly applies to petitioner's claim. Timeliness of the Claim for Refund Under Section 196 of the LGC, an action for the recovery of any local tax erroneously or illegally collected may prosper, provided the following requisites are met: (1) a written claim for refund or tax credit must be filed with the local treasurer, and (2) both the administrative and judicial claims must be filed within two (2) years from the date of payment of the tax or from the date the taxpayer became entitled to the refund or credit. In this case, petitioner paid the subject LBT for taxable year 2017 on 20 January 2017, 3-1 and thereafter filed its administrative claim for refund with th~ 34 Exhibit "C", RTC Docket (Civil Case No. 474-TG)- Vol. 3, p. 366.

DECISION CTA AC No. 302 City Treasurer of Taguig on 9 January 2019.35 Subsequently, petitioner filed its judicial claim before the RTC on 18 January 2019. 36 The foregoing dates show that both the administrative and judicial claims were filed within the two-year prescriptive period provided under Section 196 of the LCC. 1\ccordingly, petitioner's claim for refund was timely filed. Jurisdiction over the Environmental Impact Fee and Sticker Fee Before this Court proceeds to resolve the mam issue raised in the Amended Petition for Re1Jiew, it is necessary to preliminarily determine whether it has jurisdiction to rule on petitioner's claim for refund of the Environmental Impact Fee and Business Plate/Sticker Fee. "-\s a court of special and limited jurisdiction, this Court may only take cognizance of matters clearly falling within its statutory competence. Section 7(a)(3) of Republic Act No. 1125, as amended by Republic Act No. 9282, provides: "SEC. 7. JttrZ:rdiction. -The CT"-\ shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: XXX XXX XXX (3) Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction;" This provision contemplates that the appellate jurisdiction of this Court arises only when the RTC renders judgment in a local tax case, that is, a case the subject of which is in the nature of a tax, or which primarily involves a tax issue. 37 Included therein are cases involving real property tax, the validity of tax assessments or ordinances, claims for refund or exemption, tax collection, or the prescription of assessments, among others. 38 Thus, when the decision of the RTC is not in relation to a local tax, but rather pertains to a regulatory exaction, this Court lacks jurisdiction to review the samf 35 Exhibit "B", RTC Docket (Civil Case No. 474-TG)- Vol. 3, pp. 359 to 365. 36 Complaint, RTC Docket (Civil Case No. 474-TG)- Vol. 1, pp. 4 to 17. 37 Republic v. City ofSurigao, eta!., G.R. No. 218056, August 31, 2022. 38 Mactel Corporation v. City Government of Makat1~ eta!., G.R. No. 244602, July 14, 2021 citing Herarc Realty Corp. v. Provincial Treasurer of Batangas, G.R. No. 210736, September 5, 2018.

DECISION CTA AC No. 302 In Smart Communication.!', Im: VJ. i\1uniapaliry of Malvar, BatangaJ, 39 the Supreme Court clarified that where the main purpose of an imposition is to regulate-such as requiring compliance with environmental or construction standards-the exaction is a regulatory fee, not a tax. The Court therein reiterated the long-standing distinction that: "If the generation of re\'Cnue is the primary purpose and regulation is merely incidental, the imposition is a tax. But if regulation is the primary purpose, the fact that revenue is incidentally generated docs not make the imposition a tax." [Citing Progre.r.ri1;e Development Corp. 7J. Quezon Ciry (254 Phil. 635, 643) and Victoria.r Millin~~ Co., flu: 7'. Mzmidpality~/f/ictoria.r(134 Phil.180, 189-190)1 Plainly stated, to determine whether an exaction is a tax or a fee, the primary purpose of the imposition must be considered-not merely its label. In this case, the Environmental Impact Fee is imposed pursuant to Section 115 of Ordinance No. 24, Series of 1993, as amended by Ordinance No. 111, Series of2007, and further governed by Ordinance No. 116, Series of 2008. These ordinances explicitly provide that the Environmental Impact I_,'ce is meant to: (1) compensate for the negative social or environmental cost to the City of Taguig; and (2) defray the cost of hauling and management of solid waste generated by the citizens and businesses therein. Sections 2 and 4 of Ordinance No. 116, Series of 2008 further reveal that the imposition is based on the area occupied by the business or condominium entity, regardless of whether it is engaged in business. The burden is imposed even on property managers or owners in the event of tenant non-compliance, signifying a regulatory purpose rather than a revenue-raising one. ..:\ccordingly, the Environmental Impact Fee is in the nature of a regulatory fcc, and not a local tax. The same conclusion applies to the Business Plate/Sticker Fee, which is a fee imposed as a requirement for securing a business permit. Under Section 147 of the Local Government Code of 1991: "SEC. 147. Fec.r und Cbar:_~e.r. - The municipality may impose and collect such reasonable fees and charges on business and occupation x x x commensurate with the cost of regulation, inspection and licensing before any person may engage in such business or occupation or pncticc such profession or calling." (Empha.rZ:1� addcv 39 G.R. No. 204429, February 18, 2014.

DECISION CTA AC No. 302 As such, the Business Plate/Sticker l::.'ee is similarly a regulatory exaction, intended to support the inspection and regulation of businesses operating within the local government's jurisdiction. In view of the foregoing, the Court holds that both the Environmental Impact Fcc and the Business Plate/Sticker Fee are not taxes within the meaning of Section 7(a)(3) of ItA. No. 1125, as amended. Consequently, this Court does not have jurisdiction to rule on the RTC's disposition of petitioner's refund claims insofar as they pertain to the Environmental Impact Fee and Business Plate/Sticker I�'cc. This Court shall thus confine its review only to the issue of petitioner's liability for LBT. Petitioner's Liability for LBT In the assailed Judgment, the RTC ruled that petitioner's purported "admission"-that it was constrained to classify the membership fees it collected from condominium unit owners as "Revenues" in its 2016 AFS- rendcred it liable to pay LBT. In its Amended Petition for Review, petltloner explained that the term "Revenues" in its 2016 AFS refers solely to the "association dues" collected from its members. It emphasized that such classification does not alter its legal nature as a condominium corporation, which, by law, is a non-stock and non- profit entity. Petitioner further asserted that, as stated in its J\laster Deed, the income it derives is in the form of "dues," which strictly refer to fees and assessments levied upon condominium units to defray expenses and other charges necessary for the operation and maintenance of the condominium project. Consistent with the Supreme Court's ruling in )'amane, such assessments are used merely to cover the necessary expenses related to the condominium project and its common areas. Thus, petitioner maintains that its operations do not involve any business activity or profit-oriented purpose. Respondents, on the other hand, argue that Yamane is not squarely applicable to the present case. They contend that the Supreme Court's decision therein docs not constitute a categorical or express grant of exemption that may be invoked as a basis for exemption from the payment of LBT. According to respondents, Yamam docs not provide the clear and unequivocal legal basis required to sustain a claim for tax exemption, particularly where the facts and circumstances arc not identical~

DECISION CTA AC No. 302 Respondents further claim that the present case demonstrates that petitioner is indeed engaged in business, allegedly consisting of the sale of services for a fee. They assert that the recording of association dues and other collections as "Revenues" in petitioner's 1\FS constitutes conclusive proof that it is engaged in the conduct of business. Accordingly, they maintain that Yamane is not controlling and cannot serve as precedent for the resolution of this case. Petitioner's position is well-taken. A careful examination of the factual circumstances reveals that the ruling in Yamane is directly applicable to the present case. A brief recapitulation of the relevant facts and the Supreme Court's pronouncement therein is thus warranted. In Yamane, the taxpayer, a condominium corporation, was assessed for LBT by the City Treasurer of Makati on the basis of its collection of assessments from unit owners. The City Treasurer contended that such collections constituted business activity. The taxpayer, however, protested the assessment, asserting that it was neither organized for profit nor engaged in business, consistent with its character as a condominium corporation. Upon denial of its protest, the case was elevated to the Supreme Court, which ruled in favor of the taxpayer. The Court held that, by their nature, condominium corporations arc generally not subject to local business taxation under the LGC, regardless of any contrary provision in local ordinances. It declared that the collection of assessments or dues from unit owners does not constitute business activity. By way of exception, the Court clarified that a condominium corporation may be held liable for business taxes on the ground of estoppel, if it is shown to have engaged in profit-oriented activities. The Supreme Court ruled: "Still, we can note a possible exception to the rule. It is not unthinkable that the unit owners of a condominium would band together to engage in activities for profit under the shelter of the condominium corporation. Such activity would be prohibited under the Condominium [\ct, but if the fact is established, we see no reason why the condominium corporation may [not] be made liable by the local government unit for business taxes. Even though such activities would be considered as ultra vires, since they are engaged in beyond the legal capacity of the condominium corporation, the principle of estoppel would preclude the corporation or its officers and members from invoking the voi~

DECISION CTA AC No. 302 nature of its undertakings for profit as a means of acquitting itself of tax liability_"-111 The Supreme Court's ruling in Yamane was reaffirmed in Bureau ifInternal Revenue, et a!. vs. First E-Bank Tower Condominium Corp., 41 where the Court declared: "The issue on whether association dues, membership fees, and other assessm.ents/ charges collected by a condominium corporation in the usual course of trade or business is not novel. Yamane v. BA Lepanto Condominium Corp. positively resolved it, viz.: XXX XXX XXX Yamane did emphasize that a corporation condominium is not designed to engage in activities that generate income or profit. .\ discussion on the nature of a condominium corporation is, indubitably, in order. The creation of the condominium corporation is sanctioned by Republic .Act No. 4726 (RA 4726) (The Condominium Act). Under the law, a condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undi,-ided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building. To enable the orderly administration over these common areas which the unit owners jointly own, R1-\ 4726 permits the creation of a condominium corporation for the purpose of holding title to the common areas. The unit mvncrs shall in proportion to the appurtenant interests of their respectiYc units automatically be members or shareholders of the condominium corporation to the exclusion of others. Sections 10 and 22 of lZi\ 4726 focus on the non-profit purpose of a condominium corporation. Under Section 10, the corporate purposes of a condominium corporation are limited to holding the common areas, either in ownership or any other interest in real property recognized by law; management of the project; and to such other purposes necessary, incidental, or convenient to the accomplishment of these purposes. Additionally, Section 10 prohibits the articles of incorporation or by-laws of the condominium corporation from containing any provisions contrary to the provisions of I~-\ 4726, the enabling or master deed, or the declaration of restrictions of the condominium project. ,\lso, under Section 22, the condominium corporation, as the management body, may only act for the benefit of the condominium owners in disposing tangible and intangible personal property by sal;,; 4D G.R. No. 154993, October 25, 2005. 41 G.R. Nos. 215801 & 218924, January 15, 2020.

DECISION CTA AC No. 302 or otherwise m proportion to the condorninium owners' respective interests in the con1mon areas. Further, Section 9 allows a condominium corporation to pto\'idc for the means by which it should be managed. Specifically, it authorizes a condominium corporation to collect association dues, membership fees, and other assessments/ charges for: a) maintenance of insurance policies; b) maintenance, utility, gardening and other senrices benefiting the common areas, for the employment of personnel necessary for the operation of the building, and legal, accounting and other professional and technical senrices; c) purchase of materials, supplies and the like needed by the common areas; d) reconstruction of any portion or portions of any damage to or destruction of the project; and c) reasonable assessments to meet authorized expenditures. In fine, the collection of association dues, membership fees, and other assessments/ charges is purely for the benefit of the condominium owners. It is a necessary incident to the purpose to cffectiYcly oYersee, maintain, or even improYe the common areas of the condominium as \Vell as its governance. As held in Yamane, '[t]be prqfit motive in .wch caJeJ iJ bard!J tbe dn.t;ingfador behind .web improtJementJ) ~/it were contemplated at a!!. A~y prqfit that UJOZ!!d be deriJ;er/ under .ruch drct11n.rtance.r would mere.ly be imidenta!, .z/not accidental.) l\Iore, a condominium corporation is especially formed for the purpose of holding title to the common area and exists only for the benefit of the condominium owners. Nothing more." (EmpbaJiJ .rttpp!ied and dtatiom omitter~ In De!oJ Santo.r VJ. Commi.rJ-ioner of Internal Revenue, 42 the Supreme Court once again affirmed the same principle. It clarified that a condominium corporation is not engaged in trade or business, the association dues are not intended for profit but for the maintenance of the condominium project, and the collection of association dues, membership fees, and other charges is purely for the benefit of the condominium owners. As will be fully discussed below, the material facts and legal issues in Yamane arc substantially similar to those obtaining in the present case. A.ccordingly, the Court finds it proper and necessary to apply YaJtzane as controlling precedent. l\Ioreover, there is nothing on record to indicate that the present case falls within the exception recognized in the said case. Specifically, no evidence has been presented to establish that petitioner engaged 1n any business activity beyond its avowed statutory corporate purpose. Petitioner's primary purpose is to hold title to the common areas and to manage the condominium project. This is in accordance with its Articles of v Incorporation, the pertinent portion of which reads: 42 G.R. No. 222548, June 22, 2022.

DECISION CTA AC No. 302 "ARTICLES OF INCORPORATION OF SERENDRA CONDOMINUM CORPORATION XXX XXX XXX PRIMARY PURPOSE To own or hold title to the common areas in the condominium project known and identified as SERENDRA, which has been constituted pursuant to the provisions of the Condominium .Act on the property described in and brought under the operations of said Act by: (i) the Master Deed with Declaration of Restrictions dated Pebruary 11, 2004 xxx xxx xxx and to manage and administer the operation of the Project and the affairs of its members pursuant to and in accordance with the provisions of Republic Act No. 4726 and the Master Deed."43 (Empba.1ir .wpplied) Further, the ]\faster Deed reveals that the income derived by petitioner consists of "dues," referring strictly to fees and assessments levied upon the condominium units to defray expenses and other charges for the project, thus: "Dues' shall refer to the fees and assessments to be levied by the Condominium Corporation upon the Units to cover the payment of expenses and other charges for the Projcct."44 .1-\s stated above, petltloner was assessed LBT based on the amount of association dues it collected from its members, which were categorized as "Revenues" in its 2016 AFS. The Court, however, does not agree with the H.TC's conclusion that petitioner's categorization of association dues as "Revenues" constituted an "admission" that rendered it liable for LBT. A careful examination of petitioner's 2016 .AFS reveals that the item "Revenue" therein consists almost entirely45 of membership dues. As clarified in the Notes to the Financial Statcments,46 the members of the condominium corporation are the owners of the condominium units. Such membership is inseparable from unit ownership and cannot be transferred, conveyed, encumbered, or otherwise disposed of independently. The collection of association dues is inten dneedcessoslacrlyv- for the benefit of the condominium unit owners. It is an incident and incidental to the petitioner's stiltutor 43 Exhibit "E-1", RTC Docket (Civil Case No. 474-TG)- Vol. 3, pp. 401 to 402. 44 Exhibit "D", RTC Docket (Civil Case No. 474-TG)- Vol. 3, p. 368. 45 Out of the P419,971)87 petitioner's total reported revenue in 2016, 99.14% of which or P416,371,168 consists of membership dues. The remaining P3,600,219 or less than 1% pertains to interest income. 46 Par. 13, Notes to Financial Statements, Exhibit "3", RTC Docket (Civil Case No. 474-TG)- Vol. 4, p. 94.

DECISION GA AC No. 302 purpose of administering, maintaining, and preserving the common areas of the condominium project, as well as overseeing its governance in accordance with the Condominium 1\ct. As to respondents' contention that the assessment against petitioner was premised on the imposition of business tax on "Contractors" under Section 7S(e), in relation to Section 74 of the Taguig Revenue Code, the same is misplaced. Section 7S(e) of the Taguig Revenue Code provides for the imposition of LBT on contractors and other independent contractors, as defined under Section 74, including a broad enumeration of businesses engaged in the rendering or offering of various setvices for a fee. The provision, in relevant part, reads: "SECTION 75 - Imposition of Tax -There shall be levied an annual tax on the following businesses at rates prescribed therefore: XXX XXX XXX c) On Contractors and other independent contractors defined in SECTION 74 of this Code; and on owners or operators of business establishments rendering or offering services such as advertising agencies, rental of space of signs, signboards, billboard or advertisements, animal hospitals, assaying laboratories, belts and buckle shops, blacksmith shops, bookbinders, booking offices for film exchange, booking office for transportation on commission basis; breeding of game cocks and other sporting animals belonging to others; business management services; collecting agencies; escort services; feasibility studies, Consultancy services; garages; garbage disposal contractors; gold and silversmith shops; inspection services for incoming and outgoing cargoes; interior decorating services; janitorial setTices; job placements or recruitment agencies; landscaping contractors; lathe machine shops; management consultants not subject to professional tax; medical and dental laboratories; mercantile agencies; messengcrial setTices; operators of shoe shine stand; painting shops; penna-press establishments; rent-a-plant set�Yices; polo players; school for and/or horseback riding academy; real estate appraisers; real estate brokerages; photostatic; white/blue printing, photocopying, typing and mimeographing services; car rental, rental of heavy equipment, rental of bicycles and/ or tricycles; furniture, shoes, watches, household appliances, boats, typewriters, etc.; roasting of pigs, fowls, animals; silkscreen or T-shirt printing shops; stables; travel agencies; \'aciador shops; veterinary clinics; video rentals and/ or coverage services; dancing school/speed reading/EDP; nursery, vocationally and other schools not regulated by the Department of Education (DepEd), day care centers; etc., xxx." (Lmpba.rti and undmmri~l adder~

DECISION CTA AC No. 302 Meanwhile, Section 74 defines a contractor as: "Contractor includes persons, natural or juridical, not subject to professional tax whose activity consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of the service calls for the exercise or usc of the physical or mental faculties of such contractor or his employees." (Emp!1a.ri.r and unde1~rmring .rttpp!ied) C uidcd by the foregoing provisions, petitioner cannot be classified as a "contractor" within the contemplation of Sections 74 and 75(e) of the Taguig Revenue Code. Petitioner does not render administrative services as a business nor for profit. Any fees it collects from unit owners are merely incidental and necessary to the maintenance and upkeep of the condominium, and are not intended for profit or commercial gain. A condominium corporation, such as petltl.oner, cannot be deemed engaged in trade or business. The fees or dues it collects are intended solely for the mutual benefit of the condominium unit owners. ...--\ccordingly, condominium corporations arc not subject to the imposition of LBT-not by reason of tax exemption, but because they are not considered as being engaged in trade or business in the first place. Respondents' Liability for Attorney's Fees In Pbilippine National Constrmtion C01poration vs. APAC JV!arketing Corporation,47 the Supreme Court extensively discussed the prevailing rules governing the award of attorney's fees. It held that under Article 2208 of the Civil Code, attorney's fees may only be awarded in the instances enumerated therein, and only upon proper factual, legal, and equitable justification. As a general rule, attorney's fees cannot be recovered as part of damages merely because a party prevailed in a suit, in accordance with the policy that no premium should be placed on the right to litigate. In /1BS-C13N Broadcmti11g Coporation tJ. Court rif Appeals,48 the Court reiterated that even when a party is compelled to litigate with third persons or to incur expenses to protect its rights, attorney's fees may not be awarded where there is no sufficient showing of bad faith on the part of the adverse party. Similarly, in Benedicta v. Villaflores,-'~9 the Court clarified the dual nature of attorney's fees-ordinarily, as compensation for legal services rendered to a I 47 G.R. No. 190957, June 5, 2013. 48 G.R. No. 128690, January 21, 1999. 49 G.R. No. 185020, October 6, 2010.

DECISION CTA AC No. 302 client; and extraordinarily, as indemnity for damages recoverable from the losing party. In the latter sense, the Court emphasized that attorney's fees may only be awarded in the instances specifically provided under Article 2208, and only upon a clear and distinct finding of factual and legal basis. Courts must not award attorney's fees perfunctorily, and are required to explicitly state the justification for such award in their decisions. Guided by these jurisprudential pronouncements, the Court finds no error in the ruling of the RTC denying petitioner's claim for attorney's fees. Petitioner failed to establish any factual, legal, or equitable justification to warrant the award. Accordingly, the claim lacks sufficient basis in both fact and law. ACCORDINGLY, in light of the foregoing considerations, the present Amended Petition for Revieu; is PARTIALLY GRANTED. The Judgment dated June 16, 2023, and the Order dated July 10, 2023, of the Regional Trial Court ofTaguig City, Branch 271, in Civil Case No. 474- TG, arc REVERSED and SET ASIDE insofar as they dismissed the case on the ground of prescription. Respondents are ORDERED TO REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P2,306,419.68, representing erroneously or illegally paid local business tax for the year 2017. The denial of the claim for attorney's fees is AFFIRMED. As to the claims for refund of the Environmental Impact Fee and Business Plate/Sticker l4'ee, the same are DISMISSED for lack of jurisdiction. SO ORDERED. MA. BELEN M. RINGPIS-LIBAN J Assodate ustia W/E CONCUR� MARIARO

DECISION CfA AC No. 302 (On Leave) CORAZON G. FERRER-FLORES Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. ~.~ - 1 - MA. BELEN M. RINGPIS-LIBAN Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice