On December 27, 2013, Branch 143 of the Regional Trial Court (RTC) of Makati issued a Temporary Restraining Order (TRO) in the case entitled “St. Paul College of Makati v. Hon. Kim Jacinto Henares, in her official capacity as Commissioner of the Bureau of Internal Revenue,” which prohibits the Bureau of Internal Revenue (BIR) from enforcing Revenue Memorandum Order (RMO) No. 20-2013 for a period of twenty (20) days from the issuance of the TRO, or until January 16, 2014. The TRO will automatically expire at the end of the 20-day period, unless a writ of preliminary injunction is issued during the pendency of the case. The hearing on the issuance of a writ of preliminary injunction is set on January 8, 2014 at 3:00 p.m.
All member-schools which have not yet complied with RMO No. 20-2013 may choose to invoke the TRO, keeping in mind the following risks:
1. The Order of the Court granting the TRO did not state that St. Paul of Makati was required to post a surety bond, which is usually a requirement for a TRO. It is possible that the BIR may therefore argue that the Court erred in not requiring a bond and seek a ruling that the TRO was defective. If the TRO is eventually declared defective, then RMO No. 20-2013 would still be effective.
2. RMO No. 20-2013 requires all schools to submit their application for Tax Exemption Rulings, together with supporting documents, to their respective Revenue District Offices (RDO) of the BIR. It is possible that your RDO will take the position that only St. Paul College of Makati may avail of the TRO and not other schools which are not parties to the case.
3. Your RDO could also possibly take the position that the TRO is effective only within the National Capital Region (NCR), which is the territorial jurisdiction of the RTC of Makati.
We advise all member-schools that intend to refrain from complying with RMO No. 20-2013 to notify, in writing, your respective RDOs that you shall not file your application for Tax Exemption Ruling unless the TRO has expired without a writ of preliminary injunction having been issued by the RTC of Makati. We believe that this may strengthen your position that you are acting in good faith.