*806OPINION.
Littleton:The petitioners claim that the consolidated income and excess-profits-tax returns, Forms 1031 and 1103, constituted the return of each of them and that the statute of limitations began to run on the date these consolidated returns were filed on • March 30, 1918, and that since the Commissioner has not assessed any additional tax against them and did not make his determinations of the alleged deficiencies until 7 years and 5 months after March 30, 1918, their liability for any additional tax is extinguished by section 1106 of the Revenue Act of 1926.
The Commissioner contends that the petitioners, which claimed to be affiliated as subsidiaries of the North Jersey Quarry Co., in the single consolidated income and excess-profits-tax returns filed on March 30, 1918, did not file either an income-tax return, Form 1031, or an. excess-profits-tax return, Form 1103, as required and that the consolidated income-tax return, Form 1031, and the consolidated excess-profits-tax return, Form 1103, did not operate to set in motion the statute of limitations as to the assessment of any tax against the alleged.subsidiary corporations, the petitioners in this proceeding.
Section 13 (b) of the Revenue Act of 1916 provides :
Every corporation, joint-stock company or association, or insurance company, subject to the tax herein imposed, shall, on or before the first day of March, nineteen hundred and seventeen, and the first day of March in each year thereafter, * *. * render a true and accurate return of Us annual net income in the manner and form to be prescribed by the 0ommissioner,of Internal Revenue, with the approval of the Secretary of the Treasury, and containing such facts, data, and information as are appropriate and in the opinion of the commissioner necessary to determine the correctness of the net income returned and to carry out the provisions of this title. The return shall he sworn to by the president, vice president, or other principal officer, and by the treasurer or assistant treasurer. The return shall be made to the collector of the district in which is located the principal office of the corporation, company, or association, where *807are kept its books of account and other data from which the return is prepared * * *. All such returns shall as received be transmitted forthwith by the collector to the Commissioner of Internal Revenue. (Italics ours.)
Section 206 of Title II — War Excess Profits Tax — of the Revenue Act of 19IT, approved October 3,191T, provides, so far as is material here, as follows:
That for the purposes of this title the net income of a, corporation shall be ascertained and returned * * * (c) for the taxable year upon the same basis dnd in the same manner as provided in Title I of the Act 'entitled “Ah Act to increase the revenue, and for other purposes,” approved September eighth, nineteen hundred and sixteen, as amended by this Act, except that the amounts received by it as dividends upon the stock or from the net, earnings of other corporations, joint-stock companies or associations, or insurance companies, subject to the tax imposed by Title I of such Act of September eighth! nineteen hundred and sixteen, shall be deducted. (Italics ours.) • ■
Sections 212 and 213 of the Revenue Act of 191T provide, as follows
Seo. 212. That all administrative, special, and . general provisions of 'law, including the laws in relation to the assessment, remission, collection; and refund of internal-revenue taxes not heretofore specifically repealed,’ and net inconsistent with the provisions of this title are hereby extended and made applicable to all the provisions of this title and to the tax herein imposed, and all provisions of Title I of such Act of September eighth, nineteen hundtéd and sixteen, as amended by this Act, relating to'returns and payment of the -tax therein imposed, including penalties, are hereby made applicable ■ to • the tax imposed by this title. * ■
Sec. 218. That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make al( necessary regulations for carrying out the provisions of this title, and may require,any corporation, partnership, or individual, subject to the provisions.of this title, to furnish him with such facts, data and information as in his judgment are necessary to .collect the tax. imposed by this title.
The Commissioner took the position, which is not questioned! in this proceeding, that for the purpose of the excess-profits tax imposed by Title II of the Revenue Act of 1917, the income and invested capital of two or more domestic corporations might, under certain circumstances, he consolidated, and ho’gave certain instructions and promulgated certain rulings prior to the time for filing of the returns for 1917 in relation to the income-tax return, Form’ 1031, and the éxcess-profits-tax return, Foi'm 1103. In Treasury Decision 2650, promulgated February 9, 1918, the Commissioner extended to April 1, .1918, the time for filing the income-tax return- and the excess-profits-tax return required to be filed between October 16, 1917, and March 1, 1918, because of unavoidable delay in the preparation of forms and regulations for the war-excess-profits tax. In his Regulations No. 33, promulgated January 2, 1918, Treasury Decision 2690, he provided in article 203 thereof as follows: ...
Every corporation not specifically enumerated as exempt shall make- a return of annual net income whether or not it may have for the particular year *808any net income, or whether or not it shall be a subsidiary of or controlled by another corporation, and such return, if made on the basis of a calendar year, must be filed with the collector on or before March 1, next following the year for which the return is made; if on the basis of a fiscal year ending with a date other than December 31, it must be filed within 60 days after the close of such fiscal year.
This regulation related only to the return Form 1081 for the purpose of the income tax imposed by the Revenue Act of 1916, as amended by the Revenue Act of 1917. In the income-tax return, Form 1031, prescribed by the Commissioner to be filed by every corporation, the Commissioner set forth on the first page thereof under the heading “ General Instructions,” among other instructions, the following:
Excess Peoeits Tax. — For the purpose of war excess profits tax, every corporation subject to income tax shall be deemed to be engaged in business, and all the trades and businesses in which it is engaged (whether continuously carried on or not) shall be treated as a single trade or business, and all its income from whatever source derived shall be deemed to be received from such trade or business.
* sjs * * * * *
In the case of a trade or business having more than a nominal invested capital, the excess profits tax is equal to various percentages of the net income, depending on its ratio to the invested capital. Every corporation having a net income of over $3,000 for the taxable year must malee a return of .invested capital and compute the amount of tax on Form 1103.
1)i Jjs H* * # * *
Stxbsidiaey Companies. — The corporation making this return must attach hereto a list of all its subsidiary companies, if any, with the location of the principal place of business of each. Each subsidiary company must make a separate and distinct return. (Italics ours.)
The corporation excess-profits-tax return, Form 1103, prescribed by the Commissioner to be filed for the calendar year 1917 and which was used by the North Jersey Quarry Co., in which it stated the combined income and invested capital as it determined it, contained on the first page thereof under the heading “ General Instructions,” among other instructions, the following:
Who Must Make A Return on Poem 1103. — Every corporation having for the taxable year a net income of $3,000 or more (see Form 1031) must make a return on this form of its average invested capital during the taxable year and compute the amount of its excess profits tax, if any, as directed herein.
This return should be made at the same time and in the same manner as the return of net income for the taxable year on Form 1031.
Prior to the filing of the excess-profits-tax returns for the calendar year 1917, the Commissioner provided in article 77 of his Regulations 41 the following :
For the purpose of this regulation two or more corporations will be deemed to be affiliated (1) when one such corporation owns directly or controls through *809closely affiliated interests or by a nominee or nominees, all or substantially all of tbe stock of the other or others, or when substantially all of the stock of two or more corporations is owned by the same individual or partnership, and both or all of such corporations are engaged in the same or a closely related business; or (2) when one such corporation (a) buys from or sells to another products or services at prices above or below the current market, thus effecting an artificial distribution of profits or (b) in any way so arranges its financial relationships with another corporation as to assign to it a disproportionate share of net income or invested capital.
In Treasury Decision 2662, approved March 6, 1918, relating to consolidated returns for the purpose of the excess-profits tax imposed by Title II of the Revenue Act of 1917, the Commissioner provided as follows:
A consolidated return shall be filed by the parent or principal corporation in the office of the collector of the district in which it has its principal office. Each .of the other affiliated corporations shall file in the office of the collector of its respective district a return, entering thereon its name and address and replying to the questions in Schedule 1, and to questions 1, 2, 3, 4, and 11 on page 4 of Form 1103; and stating also (1) that the corporation is affiliated with a designated parent or principal corporation, (2) that its return is included in the consolidated return of such parent or principal corporation, and (3) the district in which the consolidated return is filed.
None of the petitioners filed either an income-tax return, Form 1031, as required by the statute and the rulings of the Commissioner, or an excess-profits-tax return, Form 1103, as required by section 206 of Title II of the Revenue Act of 1917 and the instructions and decisions of the Commissioner made under authority of the statute.
The Revenue Act of 1917 did not in express terms provide for the determination of the excess profits tax upon the basis of consolidated returns, and in section 1331 (a) of the Revenue Act of 1921 it was provided:
That Title II of the Revenue Act of 1917 shall be construed to impose the taxes therein mentioned upon the basis of consolidated returns of net income and invested capital in the case of domestic corporations and domestic partnerships that were affiliated during the calendar year 1917.
Section 250 (d) of the Revenue Act of 1921 provides:
The amount of income, excess-profits, or war-profits taxes due under any return made under this Act for the taxable year 1921 or succeeding taxable years shall be determined and assessed by the Commissioner within four years after the return was filed, and the amount of any such taxes due under any return made under this Act for prior taxable years or under prior income, excess-profits, or war-profits tax Acts, or under section 38 of the Act entitled “An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes,” approved August 5, 1909, shall be determined and assessed within five years after the return was filed, unless both the Commissioner and the taxpayer consent in writing to a later determination, assessment, and collection of the tax * * * Provided further, That in the case of a false or fraudulent return with intent to evade tax, or of a failure *810to file a required return, the amount of tax due may be determined, assessed, and collected, and a suit or proceeding for the collection of such amount may be begun, at any time after it becomes due * * *.
The provisions of the Revenue Acts of 1916 and 1917 required every corporation to file an income-tax return and. an excess-profits-tax return in the manner and form prescribed by the Commissioner. The Commissioner prescribed two forms, 1031 and 1103, and' gave specific instructions concerning the filing thereof, and also instructed corporations claiming to be affiliated what should be done in the matter of filing returns. He instructed that every corporation, whether affiliated or not, should file an income-tax return Form 1031. He instructed that when corporations claimed to be affiliated within the moaning of article 77 of Regulations 41, the parent or principal corporation should file a consolidated excess-profits-tax return, Form 1103, and that each of the other affiliated corporations should file in the office of the collector of its respective district an excess-profits-tax return, Form 1103, giving certain specified information.
The petitioners knew of the Commissioner’s instructions concerning the filing of returns and they had in their possession corporation excess-profits-tax return Form 1103 containing positive instructions of the Commissioner that “ every corporation * * * must make a return on this form ” and “ this return should be made at the same time and in the same manner as the return * * * Form 1031.”
- Whether the income-tax return, Form 1031, and the excess-profits-tax return, Form 1103, which were filed by the North Jersey Quarry Co., alleged parent corporation, were correct and proper returns is not material here. They were not the income and excess-profits-tax returns Required to be filed by these petitioners. These petitioners were not relieved of filing separate income and profits-tax returns merely because the alleged parent corporation had filed consolidated returns. The consolidated returns were the returns of the North Jersey Quarry Co., and the fact that the officers of the alleged parent corporation which filed the returns were also officers of the alleged subsidiary corporations would not make those returns the returns of these petitioners required to be filed by the statute and the regulations. In the case of Beam v. Hamilton, 289 Fed. 9, the Circuit Court of Appeals for the Sixth Circuit had before it the question of whether the lower court had properly held that Beam was liable for a 50 per cent penalty for failure to make an excess-profits-tax return for the year 1917. In considering that question the court discussed the matter of the income and excess-profits-tax returns required to be filed, and in that connection said:
The sole substantial question presented is whether' the penalty provision involved extends to a failure to make a return of excess profits, or whether it is limited to failure to make any income tax return. In our opinion the 50 per cent, penalty applied to the failure to make an excess profits tax return. *811The excess profits feature had its genesis in the United States in the Act' of March 3, 1917, which applied only to corporations and partnerships. The Act of October 3, 1917, with which we are concerned, applied to individuals as well, and superseded the Act of March 3, 1917, so covering the entire of the year 1917. Holmes, Federal Taxes (1923 Ed.) p. 1213. In the Act of October 3, 1917, a distinction between ordinary income taxes and excess profits taxes was clearly recognized; separate and distinct provisions being made for return of the two classes of taxes. The act was divided into 13 titles; title I relating to war income taxes, title II to war excess profits taxes, titles III to IX, inclusive, and title XI relating respectively to taxes on beverages, tobacco, and manufactures thereof, public utilities and insurance, excise, admissions and dues, stamp taxes, estate tax, and postal rates. Title X contained administrative provisions, title XII income tax amendments, and title XIII general provisions. Section 201, which is part of title II, imposed' the excess profits taxes in question. Section 212, also part of title II, expressly made applicable thereto all provisions of title I of the Act of September 8, 1916, as amended by the revenue act here in question, relating to returns and payment of the tax therein imposed, including penalties,’’ [sic] thus incorporating into title II of the Act of October 3, 1917, the requirement of section 8 of title I of the 1916 act, which requires a “ true and accurate return under oath ” to be made “ in such form as the Commissioner of Internal Revenue, with the’ approval of the Secretary of the Treasury, shall prescribe”; while section- 213 (also-part of title II)authorized -the Commissioner -of Internal Revenue, with the- approval of the Secretary of the Treasury, to make regulations for carrying out the provisions of that title, and to require corporations, partnerships, or individuals ^subject to the provisions thereof “to furnish him with such facts,-data and information as in his judgment are necessary to collect the taxes imposed - by tMs title,” viz. the excess profits taxes. In 1917 the Commissioner provided two separate forms for individual tax returns, No. 1040, entitled “ Individual Income Tax Return for Calendar Year 1917,” and No. 1101, entitled “ Individual Excess Profits Tax Return for Calendar Year 1917.” Heading A on Form 1040 contained blanks for details regarding “ income from salaries, wages,” etc. The first paragraph of instruction No. 7 (form 1040), entitled “Excess Profits Taxes,” directed that:
“ If your net income reported under A * . * * exceeded $6,000, you are subject to an excess profits tax at the rate of 8 per cent, on the amount by" which the net total under A exceeds $6,000.” - -
Heading B on Form 1040 relates "to “income from business (including'farming).” The-soeond paragraph of instruction No. 7 on that form reads:
“If your total income from all sources exceeded $6,000, and you received any income from a trade or business with invested capital, you should get a copy of the excess profits tax return (Form 1101) and calculate the amount of your tax, if any, as directed therein.”
On Form 1101 instruction 2 reads:
“ Every individual employing invested capital in his trade or business, anil having a net income for 1917 of $6,000 or more, must malee a return on this form.” ( '. , . - - -
And instruction No. 4 on Form 1101 gives the information that net income subject to excess profits taxes falls into two classes; that the first Comprises all nbt inc’ome derived from trade or businéss (including occupations--and professions) having no invested .capital or not more than,.a nopfinal capital, apd, includes incomes reported in Schedule A, Form 1040; that the tax pn such income should be computed and entered on Form 1040 according to the instructions thereon; but that all other income subject to tax (with reference to *812instruction No. 3 above, which in terms relates to excess profits taxes) should be entered on Form 1101, and the tax computed as directed in the instructions on that form. This Form 1101 contained four schedules, designated respectively as “ Net Income Subject to Tax,” “Adjusted Capital,” “ Deduction,” and “ Computation of Tax ”; each heading containing express reference to excess profits tax regulations. This Form 1101 was required to be sworn to as “ a true and complete return * * * pursuant to the Excess Profits Tax Regulations.”
We think the two returns, thus so clearly distinguished, in connection with the requirement of separate return on Form 1101, do not lose their separability or distinct identities from the fact that the amount of the excess profits tax is to be carried onto Form 1040, under headings 34 and 35, designated respectively as “excess profits tax at rate of 8 per cent, (see instruction No. 7, page 1)” and “ excess profits tax on income from business with invested capital, as computed on excess profits tax return, Form 1101,” nor from the fact that the excess profits tax is to be deducted, in line L of Form 1040, from the taxable income otherwise shown thereby.
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* * * Not only was the excess • profits tax a separate, distinct, and then novel source of revenue, but the statute and regulations, as we have above shown, in express and formal terms required separate and distinct returns thereof, and we think it clear that failure to make a separate return of excess profits tax is none the less a failure to make the return contemplated by the statute because of the mere fact that the computations on the excess profits return are to be carried onto Form 1040; the use of that form also is necessary to a complete report. By section 213 the Commissioner was undoubtedly given authority, with the approval of the Secretary of the Treasury, to require both returns.
When we consider that section 240 of the Revenue Act of 1918 provides “ That corporations which are affiliated within the meaning of this section shall, under regulations to be prescribed by the Commissioner with the approval of the Secretary, make a consolidated return of net income and invested capital for the purposes of this title [Title II — Income Tax] and Title III [War-Profits and Excess-Profits Tax], and the taxes thereunder shall be computed and determined upon the basis of such return ” and that in the Revenue Act of 1921, enacted almost three years later, Congress provided in section 1331 thereof that Title II — War Excess Profits Tax — of the Revenue Act of 1917 should be construed to impose such war-excess-profits tax therein mentioned “ upon the basis of consolidated returns,” it is evident that it was recognized at all times that each corporation claiming to be affiliated with another corporation should file separate income and excess-profits-tax returns for the year 1917. Neither the law nor the regulations permitted the filing of a consolidated income-tax return, Form 1031, for the year 1917. These petitioners did not comply either with the statute or the Commissioner’s instructions relating to the filing of returns for the year 1917.
*813These proceedings are to be distinguished from the Appeal of F. A. Hall Co., 3 B. T. A. 1172, and the Appeal of National Tank & Export Co., 3 B. T. A. 1217. Those cases concerned the year 1918. The Revenue Act of 1918 in section 240 specifically provided “ That corporations which are affiliated within the meaning of this section shall, under regulations to be prescribed by the Commissioner with the approval of the Secretary, make a consolidated return of net income and invested capital for the purposes of this title [Title II — • Income Tax] and Title III [War-Profits and Excess-Profits Tax], and the taxes thereunder shall be computed and determined upon the basis of such return.” This section required only one return to be filed for the year 1918 for the several affiliated corporations for the purpose of both the income tax and the excess-profits tax, but this was not true as to the year 1917. There is a further difference. The Board found in the Appeals of F. A. Hall Co., and the National Tank & Export Co., supra, that notwithstanding the corporations were not in fact affiliated under the Revenue Act of 1918, the consolidated return which had been filed set forth specifically the income and invested capital of each of the alleged affiliated corporations and the Commissioner was put upon notice of the income and invested capital of each corporation so that he could make a proper accounting. The income and invested capital of these petitioners were not so stated.
In view of the statutory provisions and the Commissioner’s instructions as to the filing of returns for the year 1917 and the facts and circumstances existing in these proceedings, it is the opinion of the Board that these petitioners filed no income-tax return ort excess-profitsTax return for the calendar year 1917 and the Commissioner may therefore assess and collect the tax at any time. The Commissioner’s determinations were not otherwise questioned and the deficiencies are therefore approved.
Judgment will be entered for the respondent.