Facts: Private Respondent YMCA is a non-stock, non-profit institution, which conducts various programs and activities that are beneficial to the public, especially the young people, pursuant to its religious, educational and charitable objectives. In 1980, private respondent earned an income from leasing out a portion of its premises and in addition from parking fees collected from non-members. The commissioner of internal revenue (CIR) issued an assessment to private respondent including surcharge and interest, for deficiency income tax, deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. Private respondent formally protested the assessment. In reply, the CIR denied the claims of YMCA.
YMCA then filed a petition for review at the Court of Tax Appeals (CTA). The CTA issued this ruling in favor of the YMCA allowing the YMCA to claim tax exemption on the latter's income from the lease of its real property. Said decision was also affirmed by the CA, hence, this recourse.
Issue: Whether or not CA departed from the findings of fact of the CTA and therefore violated the doctrine that findings of fact of the CTA is not reviewable.
Held: Indeed, it is a basic rule in taxation that the factual findings of the CTA, when supported by substantial evidence, will be disturbed on appeal unless it is shown that the said court committed gross error in the appreciation of facts. In the present case, the CA did not deviate from this rule. The latter merely applied the law to the facts as found by the CTA and ruled on the issue raised by the CIR.
The distinction between a question of law and a question of fact is clear-cut. It has been held that there is a question of law in a given case when the doubt or difference arises as to what the law is on a certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or falsehood of alleged facts.
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