BASES CONVERSION AND DEVELOPMENT AUTHORITY v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC O F T HE P HILIPPI NES CO URT O F T AX APPEALS QUEZON CITY ENBANC BASES C O NVE RSIO N AND DEVELOPMENT AUTHORITY, Petitioner. CTA EB Case No. 797 (CTA Case No. 8 176) - ve rsus- Present: Acosta, PJ. C asta ii eda,J r., Ba uti sta, Uy, Casa n ova , Pa la nca-E nriqu ez, Fa bon-Victorin o, Mind a ro-G rulla, and Cota ngco-Ma na las tas, JJ CO MMISSIONER OF INTERNAL Promul gated: REVENUE, tU4/f.~~~ Respondent. AUG Z9 ZOlZ ld'/etj~!,.~, X--------- - - -- ---- -------- - -- - ---- - - - -- -------------- -- --- X DECISION COTANGCO-M ANAL AST AS, J. : On appea l before the Court En Bane is the reso luti on of the CTA First Di vision, dated June 9, 2011 , whi ch deni ed peti tioner' s Motions fo r Reconsideration of the fo ll owing: a) March 28, 2011 Reso lu ti on denying petiti oner' s Petiti on fo r Rev iew; and b) Apri I 26, 2011 Reso luti on acceptin g petiti oner's Moti on fo r Reco nsiderati on, but subj ec t to th e caveat th at its pay ment of V docket fees after th e lapse of th e reg lementary peri od does not cure the juri sdi cti onal defect.

DEC ISION Page 2 of9 CTA EB No . 797 (C.T .A. Case No . 8176) Bases Convers ion and Development Authority vs . Commi ss ioner of Internal Revenue T he Facts 1 Petitioner is duly organized and existing by virtue of R.A. 7227 , as amended, with principal office located at BCDA Corporate Center, 2nd Floor, Bonifacio Technology Center, 31 51 Street, Crescent Park West, Bonifacio Global City, Tagui g City. It may be served with notices and legal processes throu gh the Office of the Government Corporate Counsel (OGCC), located at 3rd Floor, MWSS Building, Katipunan Road , Balm�a, Quezon City. Respondent Commissioner of Internal Revenue (CIR) is vested with the authority to carry out all functions , duties and responsibilities of the Bureau of Internal Revenue (BIR) , including, inter alia, the power to decide, approve , and grant claims for refunds and/or issue tax credit certificates of erroneously paid or illegally collected internal revenue taxes. On October 8, 2010, petitioner filed a Petition for Review with the CTA in order to preserve its right to pursue its claim for refund of the Creditable Withholding Tax (CWT) in the amount of P 122,079 ,442 .53 , which was paid under protest from March 19, 2008 to October 8, 2008 . The CWT which petitioner paid under protest was in connection with its sale of the BCDA-allocated units as its share in the Serendra Project pursuant to the Joint Development Agreement with Ayala Land, Inc. The Petition for Review was filed with a Request for Ex emption from the Payment of Filing Fees in the amount ofPI ,209,457 .90. On October 20, 20 I0, the CTA First Division denied petitioner's Request for Exemption and ordered it to pay the filing fee s within five days from notice. ~ 1 Rollo, C. T .A. EB Case No . 797 , pp . 2-6 .

DECISION Page 3 of9 CTA EB No. 797 (C.T.A. Case No. 8 176) Bases Co nve rsion and Deve lopme nt Authority vs. Commiss ioner of Intern al Reven ue Petiti oner moved for reco nside rati on w hich was de ni ed by the CTA First Di vision on Fe bruary 8, 2011 . BC DA was once again ord ered to pay th e filin g fees w ithin fi ve days from notice, otherw ise, the Petiti on fo r Rev iew w ill be di smi ssed. Petiti oner fi led a petiti on for rev iew w ith the CTA En Bane on February 25 , 20 II , w hi ch petiti on was returned and not deemed fi led w ithout the pay ment of the co rrect legal fees. Petiti oner once aga in emphas ized its pos iti on th at it is exem pt fro m the pay me nt of such fees. On M arch 28 , 20 II , the petiti on before th e CTA Fi rst Di v ision was d ism issed . Petiti oner atte mpted to fil e its Moti on fo r Reco nsiderati on, however, the Officer-In- C harge of the First Di vision refu sed to receive the checks for th e pay me nt of the fil ing fees, and the M oti on for Reconsiderati on. BC DA the n fi led its Moti on for Reco nsi derati on by registered ma il. Subseque ntl y, petiti oner fil ed a mani fes tati on stating the incidents re lat ing to th e filin g of its Moti o n for Reco nsiderati on. T he CTA First Di v ision, A pril 26, 20 II , issued its Reso luti on, th e di spos iti ve porti on of whi ch states: " WH EREFOR E, findin g no reaso n to deny rece ipt of the supposed Moti on for Reconsiderati on of the Pet iti oner on the di smi ssa l of its Petiti on fo r Rev iew, th e Exec uti ve Clerk of Co urt III of thi s Di vision, Atty. Marga rette Y. Guzman, is hereby DIRECTE D to allow petiti oner BC DA to fil e th e sa me, or to accept, sa id pleadin g whi ch was all egedl y mailed through registered maiL upo n rece ipt th ereof, and to co mm ence th e procedure in pay ing th e presc ribed doc ket fees, subj ec t to th e caveat herein stated, shoul d petiti oner BCDA dec ide to pursue its case." On May I 7, 2011 , petiti oner moved fo r reco nsiderati on of the A pri I 26, 20 11 reso luti on and prayed that it be a ll owed to pay th e presc ribed doc ket fees of P1 ,2 09,4 57. 90 w ithout qualificati on. O n June 9, 20 11 , the CTA First Di v isio n denied both moti ons for reco nsiderati on. ~

DEC ISION Page 4 of9 CTA EB No. 797 (C.T.A. Case No. 81 76) Bases Co nve rsion and Development Auth ority vs. Commi ss ioner of Intern al Revenue Th e Issues2 Petitioner re li es on the fo ll owing ground s: I. The CTA, First Di vision erred in di smi ssing BC DA's Petition for Rev iew for non-pay ment of th e prescribed docket fees within the prescribed peri od . II. The CTA, First Di v ision erred in ruling th at BC DA is a gove rnment owned and contro ll ed corporati on and as such, is not exempt from pay ment of legal fees und er Secti on 22 , Rul e 141 of th e Rul es of Co urt, as amend ed . Rulin g of the Court Secti on 22, Ru le 141 o f the Rul es of Court, as amend ed, prov ides for the exempti on from the pay me nt of filin g fees, as fo ll ows: "Sec . 22 . Government Exemp t. - T he Re publi c o f th e Philippin es, its age nc ies and in strume nta lit ies a re exempt fro m pay in g th e lega l fees prov id ed in the Ru le. Loca l gove rnm ents a nd gove rnm e nt-o wn ed o r - contro ll ed co rporat io ns w ith o r w itho ut ind e pe nd e nt c ha rters are not exe mpt fro m pay in g s uc h fees. xxx" Petitione r's argum ent hin ges on its class ifi cati on as a gove rnm ent instrum enta lity instead of as a governm e nt-owned or - co ntro ll ed corporatio n (GOCC). If it is an instrumenta lity then it is exempt from the pay ment of fees required und er the Ru les of Co urt. If it is a GOCC, then it is still li abl e fo r such fi ling fees. Petiti oner re lies primaril y on the rulin gs of the Supreme Court in Manila International A irport Authority (M!AA) vs. Court of Appeals) whe re the Supreme Co urt dec lared that the M IAA was a gove rnm ent instrume nta lity vested w ith co rporate powe rs. In makin g thi s dec larati on, the Supre me Court inc luded petiti oner in the e numerati on of nati ona l governm ent instrum enta liti es vested by law w ith �,.- 2 Rollo, p. 7. ' G. R. No. 155650, Jul y 20, 2006.

DECISION Page 5 of9 CTA EB No. 797 (C.T.A. Case No. 8176) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue juridical personalities without any specific discussion with respect to BCDA. Thus, we agree with the CTA Division that such determination, in relation to petitioner herein, was a mere obiter dictum. Petitioner's reliance on Executive Order (E.O.) No. 5964 is misplaced. E.O. 596 merely defines and includes "government instrumentality vested with corporate powers" or "government corporate entities" under the jurisdiction of the Office of the Government Corporate Counsel (OGCC) as principal law office of government- owned or controlled corporations (GOCCs). This has little impact on petitioner since Section 18 of R.A. No. 7227 specifically provides that the Government Corporate Counsel shall be the ex officio legal counsel of BCDA . Clearly, BCDA was very early on classified as a GOCC. Even E.O. 596 highlights that the distinction created by the Supreme Court is for the purposes of the provisions of the Local Government Code on real estate taxes, and other fees and charges imposed by local government units. It is clear that petitioner and petitioner's counsel understood this distinction, since despite the promulgation of the MIAA case on July 20, 2006, and E.O. 596 on December 29, 2006, petitioner continued to pay filing fees when it filed cases before the Supreme Court, as certified by the Deputy Clerk of Court and Chief Judicial Records Office of the Supreme Court. 5 Indeed , petitioner continued to file and pay filin g fees 6 before the Supreme Court even after the promulgation of Philippine Fisheries Development Authority vs.(r- 4 Defining and Including "Governm ent Instrum entality Vested with Corporate Powers " or ��Government Corporate Entities�� under the Jurisdiction ol the Office o/the Government Corporate Counsel (OGCC) as Principal Law Office ol Government-Owned or Controlled Corporations (GOCCs) andjiJr Other Purposes. Dece mber 29, 2006. 5 Rollo, pp. 108-109. 6 Ibid.

DECIS ION Page 6 of9 CTA EB No. 797 (C. T.A. Case No . 81 76) Bases Conversion and Deve lopm ent Authori ty vs . Commiss ioner of Intern al Reven ue Court of App eal:/ on July 3 1, 2007; and Man ila International Airport Authority vs. City of Pasay, et al. 8 on April 2, 2009, which aga in included BC DA as a gove rnment instrumenta lity w ith co rporate powers. Petiti oner now a ll eges th at its positi on as a government instrum entality was further supported w ith the enactm ent of Re publi c Act (R.A.) No . 10149, entitl ed An Act to Promote Financial Viability and Fiscal Discipline in Government-Owned or - Controlled Corporations and to Strengthen the Role of the State in its Governance and Ma nagement to Make Th em More Responsive to the Needs ofPublic Interest and for Other Purposes, w hich prov ides: "Secti on 3. Definiti on of Term s. - XXX (n) Government Instrumentalities with Corporate Powers (G ICP)/Government Corporate Entities (GCE) refer to in strum entalities or age ncies of th e gove rnm ent, whi ch are neither co rporati ons nor age ncies integrated with in the departmental fram ework, but vested by law with spec ial fun cti ons or jurisdi cti on, endowed with so me if not all co rporate powe rs, admini sterin g spec ial fund s, and enj oy ing operati onal autonomy usua ll y through a charter including, but not limited to, th e fo ll ow in g: th e Manil a Inte rn ati ona l Airport Authority (MI AA), th e Phil ippine Po11s Auth ority (PPA), th e Philippine Depos it In surance Co rporat ion (PD IC), th e Metropolitan Waterwo rks and Sewerage System (MW SS), th e Lagun a Lake Deve lopment Auth ority (LLD A), th e Ph ilippine Fi sheri es Deve lopment Auth ority (PFDA), th e Bases Conve rsion and Deve lopment Auth ority ( BC DA), th e Ce bu Port Auth ority (C PA), th e Cagayan de Oro Port Authori ty, th e San Fe rn and o Po11 Auth ority, th e Loca l Water Utilities Ad mini stration (LW UA) and th e Asian Produ cti vity Orga ni zati on (A PO) ." While th e above definiti o n inc ludes petit io ner BC DA as a government instrumentality w ith corporate powers, Secti on 3(o) spec ificall y prov ides that for the purposes of said Act, gove rnm ent instrum enta liti es w ith corporate powers and gove rnm ent corpo rate entiti es sha ll be included in th e term GOCC. ~ 7 G. R. No. 169386. 8 G.R. No . 163 072.

DECIS ION Page 7 of9 CTA EB No. 797 (C.T.A . Case No. 8176) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue Indeed, E.O . 596 and R .A. 10149, taken together show the intent of the legislature to treat petitioner, continuously and as it has been previously treated , as a GOCC. Thus, under E.O. 596, petitioner continued to be represented by the OGCC , as befitting its status as a GOCC ; and under R .A. I0149, petitioner was treated as a GOCC with respect to financial viability and fiscal discipline. In fact, even petitioner has continuously acted as a GOCC with respect to its filing fees, as evidenced by the certification from the Supreme Court. It is notable that when the first MlAA case was promulgated, and E.O. 596 was issued , both in 2006, petitioner stil l continued to pay filing fees on its cases filed before the Supreme Court. Indeed, even after the MIAA case was reiterated in the PFDA case in 2007 and in the second MIAA case in 2009, petitioner still paid filing fees before the Supreme Court. Again, when R.A. 10149 was enacted in 2010, petitioner continued to pay its filin g fees before the Supreme Court. What is notable is that it is only before this Court that petitioner requested for exempti on from the payment of filing fees . As shown in the Supreme Court's cet1ification, even after petitioner filed its petition for review with the CTA on October 8, 20 10, it then subsequently filed petitions and paid its filin g fees before the Supreme Cow1 on November 15 , 2010 for G .R. No. 194247, and again on December 21 , 20 I0 for G.R. No . 194675.9 In light of the foregoing, we quote the June 9, 2011 Resolution of the CTA First Division, to wit: " BCDA fails to raise any new and substantia l arguments, and no cogent reason exists to warrant a consideration of the Court' s Resolution dated March 28 , 20 II dismissing its Petition for Review. ~ 9 Rollo, pp. I08-1 09 .

DEC ISION Page 8 o1 9 CTA EB No. 797 (C.T.A . Case No . 81 76) Bases Conversion and Deve lopment Authority vs. Co mmiss ioner of In tern al Revenue It mu st be emphas ized that payment in full of doc ket fees within th e prescribed peri od is ma nd a tory . It is an essential requirement with out wh ich the dec ision appea led from would become fin a l and exec utory as if no appeal had bee n fil ed. To repeat, in both ori g inal and appell ate cases, th e co urt acquires jurisdi cti on ove r th e case only upon th e pay ment o f the prescribed doc ket fees. In thi s case, du e to BCDA' s non-payment of th e prescribed lega l fees within th e prescribed peri od, thi s Co urt has not acquired jurisdi cti on ove r th e case. Co nsequ entl y, it is as if no appea l was eve r fi led with thi s Co urt. Eve n granti ng that BC DA was able to pay th e presc ribed lega l fees on April 7, 20 I I with out inc ident, th at circum stance does not cure th e jurisdicti onal defect, since almost two (2) month s had elapsed from th e tim e BC DA rece ived a co py o f th e Reso lution dated February 8, 2011 (i. e., on Fe bruary II , 20 11 ), embody in g thi s Co urt' s directi ve for BC DA to pay th e presc ribed lega l fees within fi ve (5) days from such rece ipt. The exc hange of co rrespo nd ence, in th e interim, between BC DA and th e Co urt 's Exec uti ve C lerk of Co urt IV, Atty. Elvessa P. Apo linari o, is of no moment, since it is th e Colllt whic h ord ered such payment, and not th e sa id Co urt o ffi c ia l. Moreover, it mu st be pointed out th at th e delay in th e pay ment o f lega l fees herein , co up led with th e fac t th at BC DA had prev iously and prompt ly pa id lega l fees to the Supreme Co urt when it fil ed ce rta in cases before it, negates th e existence of good fa ith , nor co uld it be co ns idered as an " honest beli ef and pos ition" on th e part of BC DA th at it is exe mpt th erefrom. Fina ll y, the claim of BCDA th at th ere is no indi ca ti on that BC DA' s non-payment of th e presc ribed doc ket fees was done de liberate ly in defi ance of th e Rul es of Co urt is beli ed by its co ntinu ous refu sa l to pay th e sa id fees, despite be in g all owed to do so with a caveat in th e Co urt ' s Reso lution dated April 26, 20 11 , und er th e pretext th at BC DA wo uld wa nt to do so " with out qu a li fica ti on" . WH E RE FORE, prem1ses considered, th e instant Pe titi on for Review 1s hereby DISMI SSE D. SO ORD E RED. #r-+.-/;L_ AMELIA R. COTANGCO-MANALASTAS Associ ate Justi ce

DEC I SION Page 9 of9 CTA EB No . 797 (C.T.A . Case No . 8 176) Bases Convers ion and Deve lopment Auth or ity vs . Commissio ner of Internal Reve nue WE CONCU R: t __z-tz. ~ ~ EnNESTO D. ACOSTA Presiding Justi ce ~~~ C. ~~ct~ \2_ ' JiJA~NITO c. CASTANEDA/J R. Associate Justi ce CAESAR~NOVA Assoc iate Justi ce o~~A~A~UEZ Associ ate Justi ce ~N . ~1~-C~ CIELITO N. MINDARO-G RULLA Assoc iate Justi ce CERTIFICATION Pursuant to Section 13, A rticle VIII of th e Constituti on, it is hereby certifi ed th at the above Dec ision has been reached in consultati on w ith the members of the Court En Bane before the case was ass igned to the writer of the opinion of the Court. ~__..~ [, . (?'-rYL_ ERNESTO D. ACOSTA Pres iding Justi ce