Court Opinion

ID: 4477253
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:26.42504+00
Date Added: 2024-06-11T14:53:54.887286
License: Public Domain

Opper, J., dissenting: Since I am still convinced that Congress intended to and did suspend the statute of limitations as to both parties while a validly submitted claim under section 722 was being considered, I must respectfully dissent. There can be little question that the main congressional purpose of having the entire excess profits tax liability litigated when section 722 becomes operative, see H. Fendrich, Inc. v. Commissioner, (C. A. 7) 192 F. 2d 916, would be frustrated if either the respondent were unable to collect a deficiency or the taxpayer were barred from exercising the corresponding privilege of receiving an overpayment. The legislation and its history have by now been too often discussed to require detailed repetition. Commissioner v. Pittsburgh & Weirton Bus Co., (C. A. 4) 219 F. 2d 259; Martin Weiner Corp. v. Commissioner, (C. A. 2) 223 F. 2d 444; Packer Publishing Co. v. Commissioner, (C. A. 8) 211 F. 2d 612; H. Fendrich, Inc. v. Commissioner, supra; see also Willy-Overland Motors, Inc. v. Commissioner, (C. A. 6) 219 F. 2d 251; Commissioner v. Smith Paper, Inc., (C. A. 1) 222 F. 2d 126. But I think it must be beyond question that upon the dispatch of a notice of disallowance of the 722 claim (see California Vegetable Concentrates, Inc., 10 T. C. 1158), respondent could, regardless of the lapse of time (see Commissioner v. Pittsburgh & Weirton Bus Co., supra), claim the existence of a deficiency or, in his answer, ask for an increased deficiency: If the Board does not find an overassessment but finds a deficiency in such cases, such deficiency may be assessed and collected, regardless of any statute of limitations otherwise applicable. * * * [H. Rept. No. 146, 77th Cong., 1st Sess. (1941), p. 16,1941-1 C. B. 660. Emphasis added.] Aside from section. 732, directed to 722 claims, the intention to give a taxpayer the right to recover overpayments wherever determination of a deficiency is permissible seems to me to be evident from the carefully calculated provisions of section 322 (d). And even if there are any apparent inconsistencies between the technical requirements of section 322 and suspension of the statute of limitations in such a case as this, which is merely a matter of interpretation, it seems to me necessary to read the two provisions together and conclude that section 732 being the more special statute must prevail in order to carry out the congressional purpose. See California Vegetable Concentrates, Inc., supra, at 1169. The mischief of any such technical limitation as is now being imposed is well illustrated by this proceeding as it was in Martin Weiner Corp. v. Commissioner, supra. If a taxpayer is entitled to compute its tax in a more favorable manner because, for example, of an invested capital situation as here, or of' the application of the growth formula of section 713 as in Martin Weiner Corp. v. Commissioner, supra, it cannot of course claim relief under section 722. Irwin B. Schwabe Co., 12 T. C. 606; Homer Loughlin China Co., 7 T. C. 1325; Acme Breweries, 15 T. C. 682. But see Jefferson Amusement Co., 18 T. C. 44. This is because the excess profits tax provisions taken as a whole are not then excessive or discriminatory as to it. Irwin B. Schwabe Co., supra, at 617; Homer Laughlin China Co., supra, at 1333. But the very provision upon which the respondent relies for defeating the 722 claim is the one under which the taxpayer is admittedly entitled to a decision that he has overpaid his tax. To say in such a case that the admitted overpayment cannot be recovered although the entire controversy was pending at all times seems so completely unreasonable that I feel convinced it cannot represent the congressional intent. The claim raising the invested capital issue here was filed before notice of disallowance of the 722 claim was sent — in other words, while as I think any limitations were being suspended. The notice of dis-allowance was followed by a timely petition. At least under such circumstances, “such notice of disallowance shall be deemed to be a notice of deficiency for all purposes relating to * * * the refund or credit of overpayments.” (Sec. 732 (a), I. R. C. 1939. Emphasis added.) We know that this broad language was expressly intended to include the statute of limitations aspect. H. Rept. No. 146, supra. It seems to me to follow that both the specific legislative purpose of permitting all issues to be effectively litigated in connection with a 722 claim, and the more general one of lifting the limitations bar for the taxpayer wherever the respondent has been similarly treated, are being disregarded by the present result which seems to me, therefore, necessarily incorrect.