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[G.R. No. 128783.December 10, 2001]

PHIL. ASSN. OF REALTORS BOARD, INC. vs. BIR

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated DEC 10 2001.

G.R. No. 128783 (Philippine Association of Realtors Board, Inc. vs. Bureau of Internal Revenue.)

This petition seeks to declare unconstitutional Section 102 (a) of the National Internal Revenue Code (NIRC), prior to its amendment by Republic Act Nos. 7716, 8241 and 8424, and BIR VAT Ruling No. 102 (a)/000-00/077-92 dated June 2, 1992.

The facts are as follows:

On June 28, 1991, Geronimo J. Manzano of the G. J. Manzano Realty requested from the Bureau of Internal Revenue (BIR) a refund of P67,554.00, representing the Value Added Tax (VAT) paid on commissions he received as a licensed real estate broker. The request was based on Section 103 (r) of the NIRC, prior to its amendment by R.A. 7716 and subsequent laws aforecited.

The BIR, in its VAT Ruling No. 102(a)/000-00/07792 dated June 2, 1992 denied the request and held that real estate brokers were subject to 10% VAT under Section 102 of the Tax Code. The provision of the law cited by petitioner was not applicable because it referred to lawyers, doctors, accountants and others whose profession required a bachelor's degree and a government bar or board examination.

Thereafter, Justo M. Ortiz, also a real estate broker, wrote public respondent a letter dated April 18, 1994, claiming that real estate brokers should not be treated differently from other professionals who enjoy VAT exemption because real estate brokers also undergo licensure examinations conducted by the Department of Trade and Industry (DTI) and that only

Public respondent also denied Ortiz's request and reiterated VAT Ruling No. 102 (a) /000-00/07792.

In view of the above, petitioner, an association of real estate service practitioners, filed the instant petition where it avers that Section 102 (a) of the NIRC is unconstitutional since it discriminates against real estate brokers by subjecting them to VAT, unlike other professionals.

In this petition, petitioner is asking this Court to exercise its power of judicial review under Section 1, Article VIII of the 1987 Constitution, in order to determine the constitutionality of Section 102 (a) of the 1977 Tax Code.

However, we take judicial notice that the National Internal Revenue Code of 1977 has been amended by Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997. Section 109 thereof removes those engaged in the exercise of their profession, from the exemption from VAT. Hence, the alleged unequal treatment between real estate brokers on the one hand, and doctors, lawyers, accountants and other professionals on the other hand, no longer exists. The constitutionality issue has therefore been rendered moot and academic.

WHEREFORE, for being moot and academic, the instant petition is DISMISSED.

SO ORDERED.

Very truly yours,

(Sgd.) TOMASITA M. DRIS
Clerk of Court

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