Decision will be entered under Rule 50.
1. On December 15, 1950, there was sent to petitioner by registered mail a joint notice of deficiency and disallowance in respect of the taxable years 1941 to 1944, inclusive. In this combined notice, the Commissioner determined deficiencies in petitioner's income tax for each of the years 1941, 1942, 1943, and 1944, and he allowed petitioner section 722 relief in part and disallowed it in part. Petitioner did not appeal from the determination of deficiencies in income tax. It did appeal from the disallowance in part of its application for section 722 relief. The Commissioner has moved to dismiss the proceeding insofar as it appeals from the income tax deficiencies on the ground that such deficiencies had been paid prior to the mailing of the deficiency notice. Held, no appeal having been taken from the determination of deficiencies in petitioner's income tax, there is no proceeding to dismiss of the kind respondent has mentioned in his motion. Motion denied.
2. The Commissioner's combined notice of deficiency and disallowance determined that there was an overassessment in petitioner's excess profits tax for the year 1942 of $ 11,088.77. 1954 U.S. Tax Ct. LEXIS 314">*315 Of this amount, $ 4,646.45 was due to standard issue adjustments and $ 6,442.32 represented relief granted under section 722. Held, we have no jurisdiction to enter a decision for refund of the $ 4,646.45 due to standard issue adjustments because no deficiency in petitioner's excess profits tax for 1942 has been determined. Mutual Lumber Co., 16 T.C. 370, followed. We do have jurisdiction to enter judgment of overpayment of $ 6,442.32 determined by the Commissioner as relief under section 722.
21 T.C. 470">*471 Respondent made determinations with reference to petitioner's income and excess profits tax liabilities for the calendar years 1941 through 1944, as follows:
You are advised that the determination of your income tax liability for the taxable years ended December 31, 1941, 1942, 1943 and 1944 discloses deficiencies of $ 998.56, $ 8,385.06, $ 10,455.88 and $ 8,004.81, respectively; that the determination of your excess profits tax liability for the taxable years ended December 1954 U.S. Tax Ct. LEXIS 314">*316 31, 1941 and 1942 discloses overassessments of $ 3,221.16 and $ 11,088.77, respectively, and that the determination of your excess profits tax liability for the taxable years ended December 31, 1943 and 1944 discloses deficiencies of $ 30,078.73 and $ 49,982.54, respectively, as shown in the statement attached.
In making this determination, your applications for relief under Section 722, filed September 4, 1943 for the taxable years 1941 and 1942, filed March 15, 1944 and August 9, 1948 for the taxable year 1943 and filed March 15, 1945 for the taxable year 1944 have been given careful consideration. Because of the deferment under Section 710 (a) (5) of the Internal Revenue Code of the tax liability shown on your return and other adjustments affecting your excess profits tax liability for the taxable years ended December 31, 1943 and 1944 the determination of your excess profits tax liability for these years results in deficiencies of excess profits tax instead of overassessments. It has been determined that the relief requested has been allowed in part.
Petitioner made the following assignments of error:
(a) In determining the constructive excess profit credit for the years involved 1954 U.S. Tax Ct. LEXIS 314">*317 under Code Section 722
(1) By assuming that sales for 1939 were normal.
(2) By failure to make adjustment to constructive income for 1939, in denying credit for excess remnant losses.
(3) By failure to make allowance for constructive decreased costs of operation.
Respondent, by motion filed January 26, 1953, moved to dismiss the petition insofar as it appeals from the determination of deficiencies in income taxes for 1941 to 1944, inclusive, on the ground that these taxes had been paid prior to the date of the deficiency notice and it was, therefore, error to determine deficiencies.
All the issues raised in this proceeding have been settled by stipulation except the issue raised by respondent's motion to dismiss for lack of jurisdiction, and one other. This other issue is: Does this Court have jurisdiction to permit petitioner to recover $ 4,646.45 of the $ 11,088.77 overassessment of excess profits tax for 1942?
21 T.C. 470">*472 FINDINGS OF FACT.
All of the facts have been stipulated and are found accordingly.
The petitioner is a corporation organized in 1931 under the name of Wohl Fabrics Company under the laws of the State of New Jersey. On or about January 10, 1946, the name of petitioner was changed 1954 U.S. Tax Ct. LEXIS 314">*318 to Martin Weiner Corp.
On January 2, 1941, the board of directors of Wohl Fabrics Company, at a meeting regularly called, appointed the following as officers of the corporation:
| Samuel Wohlman | President |
| Martin Weiner | Secretary and Treasurer |
| Jesse Weiner | Assistant Secretary |
These officers continued to serve to December 31, 1945.
In respect to the taxable year 1942, petitioner, under the name Wohl Fabrics Company, filed with the collector of internal revenue for the fifth district of New Jersey at Newark a document numbered Form 1120, entitled "Corporation Income and Declared Value Excess-Profits Tax Return" and a document numbered Form 1121 entitled "Corporation Excess Profits Tax Return." Each of these documents bears the sworn signature of only one corporate officer, to wit, that of Samuel Wohlman, president; they do not bear the signature or oath of any other corporate officer. The documents do not have affixed to them petitioner's corporate seal. The taxes reported on these documents filed for the taxable year 1942 were paid as follows:
| Income Tax | Excess Profits Tax | ||
| Date | Amount paid | Date | Amount paid |
| May 15, 1943 | $ 10,035.00 | June 10, 1943 | $ 649.73 |
| Aug. 2, 1943 | *1954 U.S. Tax Ct. LEXIS 314">*319 (7,406.20) | Aug. 2, 1943 | ** 7,406.20 |
| Aug. 10, 1943 | 2,628.79 | Aug. 10, 1943 | 8,055.93 |
| Sept. 17, 1943 | 2,628.79 | Sept. 17, 1943 | 8,055.93 |
| Jan. 1, 1944 | 2,628.81 | Jan. 1, 1944 | 8,055.95 |
| Total | $ 10,515.19 | Total | $ 32,223.74 |
On September 4, 1943, petitioner, in respect of the year 1942, filed a claim for relief on Form 991 pursuant to section 722 of the Internal Revenue Code. On March 15, 1947, petitioner filed a document on Form 843, and on August 19, 1947, petitioner filed a document on Form 843. These Forms 843 are related to petitioner's claim for relief under section 722 on Form 991. The aforesaid Form 991 and Forms 843 relate exclusively to relief under section 722; they contain no claims for refund due to standard issue adjustments.
On January 8, 1946, the petitioner and the Commissioner of Internal 21 T.C. 470">*473 Revenue, pursuant to section 276 (b) of the Internal Revenue Code, executed an agreement providing as follows:
that the amount of any income, excess profits, or war profits taxes due under any return (or returns) made by or on behalf of the above-named taxpayer (or taxpayers) for the taxable year ended December 31, 1942, under existing acts, or under prior revenue acts, may be assessed at any time on or before June 30, 1947, except that, if a notice of deficiency in tax is sent to said taxpayer 1954 U.S. Tax Ct. LEXIS 314">*320 (or taxpayers) by registered mail on or before said date, then the time for making any assessment as aforesaid shall be extended beyond the said date by the number of days during which the Commissioner is prohibited from making an assessment and for sixty days thereafter.
By subsequent agreements the time for assessment of such taxes in respect of the year 1942 was extended to June 30, 1951.
A letter dated September 26, 1950, from the internal revenue agent in charge at Newark, New Jersey, was sent to and received by petitioner shortly thereafter. Enclosed with the letter was a statement and computation of petitioner's total tax liability as corrected for the taxable years 1941 to 1944, in the exact figures shown in the notice of deficiency and disallowance dated December 15, 1950.
On December 4, 1950, petitioner deposited with the collector of internal revenue at Newark, New Jersey, the following amounts with the request that these amounts be applied in payment of the imminent deficiencies in petitioner's income taxes for the taxable years 1941, 1942, 1943, and 1944, as set out in the computation which accompanied the letter of September 26, 1950:
| Imminent deficiency | |
| Year | in income tax |
| 1941 | $ 998.56 |
| 1942 | 8,385.06 |
| 1943 | 10,455.88 |
| 1944 | 8,004.81 |
These 1954 U.S. Tax Ct. LEXIS 314">*321 amounts were held in the suspense account until the deficiencies in income taxes for the years 1941 to 1944 were assessed on April 29, 1951, as hereinafter set out.
On December 15, 1950, there was sent to petitioner by registered mail a notice of deficiency and disallowance in respect of the taxable years 1941 to 1944, inclusive, indicating a net total deficiency of $ 92,595.65, computed as follows:
| Tax Liability for the Taxable Years Ended December 31, 1941, | ||||
| 1942, 1943, and 1944. | ||||
| Year | Liability | Assessed | Deficiency | Overassessment |
| Income Tax | ||||
| 1941 | $ 38,917.10 | $ 37,918.54 | $ 998.56 | |
| 1942 | 18,900.25 | 10,515.19 | 8,385.06 | |
| 1943 | 20,971.08 | 10,515.20 | 10,455.88 | |
| 1944 | 21,170.00 | 13,165.19 | 8,004.81 | |
| Totals | $ 99,958.43 | $ 72,114.12 | $ 27,844.31 |
| Tax Liability for the Taxable Years Ended December 31, 1941, | ||||
| 1942, 1943, and 1944. | ||||
| Year | Liability | Assessed | Deficiency | Overassessment |
| Excess Profits Tax | ||||
| 1941 | $ 31,152.96 | $ 34,374.12 | $ 3,221.16 | |
| 1942 | 21,134.97 | 32,223.74 | 11,088.77 | |
| 1943 | 117,078.33 | 86,999.60 | $ 30,078.73 | |
| 1944 | 155,260.13 | 106,277.59 | 48,982.54 | |
| Totals | $ 324,626.39 | $ 259,875.05 | $ 79,061.27 | $ 14,309.93 |
| Net total deficiency of taxes | $ 92,595.65 |
On February 23, 1951, petitioner filed the petition in the instant proceeding seeking relief only in respect of its excess profits 1954 U.S. Tax Ct. LEXIS 314">*322 tax under section 722 of the Code.
On April 29, 1951, no petition with this Court having been filed with respect to the income taxes determined in the notice of deficiency and disallowance dated December 15, 1950, and more than 90 days having expired after said date, the respondent assessed the income tax deficiencies determined in said notice, to which interest was added, as follows:
| Income Tax Assessed -- April 29, 1951 | |
| Year | Amount |
| 1941 | $ 998.56 |
| 1942 | 8,385.06 |
| 1943 | 10,455.88 |
| 1944 | 8,004.81 |
The deposits made by the petitioner on December 4, 1950, were applied in payment of the income taxes for the years 1941 to 1944, inclusive, assessed on April 29, 1951, as aforesaid. The amounts of interest assessed in respect of said deficiencies in income taxes for the years 1941 to 1944, inclusive, as aforesaid, were paid by petitioner on June 13, 1951.
The computation of petitioner's excess profits tax liability for the taxable year 1942, computed in accordance with the so-called "growth formula" pursuant to the provisions of section 713 (f) of the Internal Revenue Code, is as follows:
| Year 1942 | ||
| EXCESS PROFITS TAX | ||
| 1. Excess profits net income as determined in statutory | ||
| notice of deficiency dated December 15, 1950 | $ 71,408.30 | |
| 2. Less: Specific exemption | $ 5,000.00 | |
| Excess profits credit (shown below) | 35,766.87 | 40,766.87 |
| 3. Adjusted excess profits net income | $ 30,641.43 | |
| 4. 90% of item 3 | $ 27,577.29 | |
| 5. Surtax net income (without credit of Section 26 (e)) | 71,408.30 | |
| 6. 80% of item 5 | 57,126.64 | |
| 7. Income tax (computed above) | 15,106.44 | |
| 8. Excess of item 6 over item 7 | $ 42,020.20 | |
| 9. Item 4 or item 8, whichever is lesser | $ 27,577.29 | |
| 10. Excess profits tax liability | $ 27,577.29 | |
| Less: Tax assessed | 32,223.74 | |
| Overassessment of excess profits tax | $ 4,646.45 | |
| POST-WAR REFUND OF EXCESS PROFITS TAX AND CREDIT FOR DEBT | ||
| RETIREMENT | ||
| Excess profits tax (item 10 above) | $ 27,577.29 | |
| Credit allowable under section 780 and 781 | 2,757.73 | |
| Net post-war refund | 2,757.73 | |
| Excess Profits Credit: | ||
| Excess profits credit as shown in Revenue Agent's Report dated | ||
| April 23, 1945 | $ 34,166.87 | |
| Add: | ||
| Capital addition as shown in statutory notice (8% of $ 20,000.00) | 1,600.00 | |
| Excess profits credit as above | $ 35,766.87 |
1954 U.S. Tax Ct. LEXIS 314">*323 21 T.C. 470">*475 As so computed, the average base period net income is $ 35,965.13, the excess profits tax liability for the year 1942 is $ 27,577.29, and the overpayment in excess profits tax for the year 1942 is $ 4,646.45.
A constructive average base period net income for the year 1942 is $ 43,500.
A revenue agent's report dated April 23, 1945, made the following standard issue adjustments from the document filed by the petitioner on Form 1121 and entitled "Corporation Excess Profits Tax Return" for the taxable year 1942:
(a) It decreased officers' salaries reported by petitioner by $ 3,500.00. This is an adjustment in favor of the respondent.
(b) It increased petitioner's average base period net income from $ 28,530.68 reported on said Form 1121 to $ 35,965.13 by use of the so-called "growth formula" under section 713 (f) of the Internal Revenue Code. This is an adjustment in favor of the petitioner.
And a third adjustment
increased petitioner's excess profits credit by $ 1,600.00 to reflect an additional excess profits credit for net capital additions of $ 20,000.00, computed on the basis of 8% of the $ 20,000.00, pursuant to the provisions of sections 713 (a) [1] (B) and 713 (g) of the Internal Revenue Code. 1954 U.S. Tax Ct. LEXIS 314">*324 * * *
In addition to the aforementioned standard issue adjustments, the combined notice of deficiency and disallowance makes a section 722 relief adjustment. Under this latter adjustment, the respondent in the statutory notice substituted a constructive average base period net income (CABPNI) of $ 43,500 for the average base period net income (ABPNI) of $ 35,965.13 computed under the "growth formula" in the revenue agent's report of April 23, 1945. The net result of these adjustments was to determine a total overassessment of petitioner's excess profits tax for 1942 in the amount of $ 11,088.77, of which $ 4,646.45 is attributable solely to standard issue adjustments 21 T.C. 470">*476 and the balance, or $ 6,442.32, is attributable solely to relief under the provisions of section 722 of the Internal Revenue Code.
The petitioner does not contest the deficiencies in excess profits tax for the taxable years 1943 and 1944, and the amount of the overassessment for the taxable year 1941, as determined in the combined notice of deficiency and disallowance.
OPINION.
On January 26, 1953, respondent moved that this proceeding be dismissed insofar as it relates to income taxes for the taxable years 1941 to 1944, 1954 U.S. Tax Ct. LEXIS 314">*325 inclusive. In support of his motion to dismiss for lack of jurisdiction respondent urges the following grounds:
1. THAT the parties have stipulated that the amounts set forth as deficiencies in income tax in a combined notice of deficiency and disallowance were actually paid prior to the mailing of said notice and were assessed on April 29, 1951.
2. THAT the Court, therefore, has no jurisdiction of the proceeding in so far as it relates to income taxes for the taxable years 1941 to 1944, inclusive.
We have no proceeding before us with reference to the deficiencies in petitioner's income tax for the years 1941 to 1944, inclusive. It is true, as shown in our Findings of Fact, that the Commissioner determined deficiencies in petitioner's income tax for each of the years 1941, 1942, 1943, and 1944. But the petition contains no assignments of error contesting the deficiencies in income tax. In fact, it has been stipulated that:
On February 23, 1951, petitioner filed the petition in the instant proceeding seeking relief only in respect of its excess profits tax [under section 722 of the Code].
We have held in several cases that a deficiency in income tax is one thing and a deficiency in excess 1954 U.S. Tax Ct. LEXIS 314">*326 profits tax is another. One can be appealed from by the taxpayer while, at the same time, he may accept the determination of the Commissioner as to the other. Cf. Will County Title Co., 38 B. T. A. 1396, and Superheater Co. v. Commissioner, 125 F.2d 514.
In the instant case it is plain that the petitioner did not appeal from the deficiencies in income tax which the Commissioner had determined against it for the years 1941, 1942, 1943, and 1944. No appeal having been taken from them, there is, therefore, nothing to dismiss. The Commissioner's motion to dismiss for lack of jurisdiction is therefore without merit and is denied.
Do We Have Jurisdiction to Enter Judgment of Overpayment of $ 4,646.45 in Excess Profits Tax Attributable to Standard Issue Adjustments
21 T.C. 470">*477 The only issue left before us, aside from the question of jurisdiction as to income tax which we have just disposed of, is whether a refund of $ 4,646.45 of the $ 11,088.77 overpayment in excess profits tax determined for 1942 is within the jurisdiction of the Tax Court and, if within the jurisdiction of the Court, is barred by the statute of limitations. With respect to the $ 4,646.45 aforesaid respondent, in his amended 1954 U.S. Tax Ct. LEXIS 314">*327 answer, pleads:
13. That under the provisions of section 322 (d) of the Internal Revenue Code the Tax Court may not determine as an overpayment due to the petitioner for the taxable year 1942 the said amount of $ 4,646.45.
The respondent does not dispute that the balance, or $ 6,442.32, of the overpayment, being solely attributable to section 722 relief for which a timely valid claim for refund was filed, is refundable to the petitioner. Respondent argues that this Court cannot direct refund of the $ 4,646.45 in question for the following reasons: (1) The Tax Court does not have jurisdiction because it is an overpayment due to standard issues and is not related to section 722 relief and the Commissioner has not determined any deficiency in petitioner's excess profits tax for 1942, but, on the contrary, has determined an overassessment, and (2) this $ 4,646.45 is attributable to standard issue adjustments and petitioner's right to a refund of the portion of the overassessment in excess profits tax for the taxable year 1942 solely attributable to standard issue adjustments is defeated by petitioner's failure to bring itself within either the 2- or the 3-year limitation period of section 322 (d) of the Internal Revenue Code.
The 1954 U.S. Tax Ct. LEXIS 314">*328 petitioner contends that the refund of $ 4,646.45 should be granted by the Tax Court for the following reasons: (1) The 3-year statute of limitations under section 275 (a) for the year 1942 was extended by agreements between the petitioner and the Commissioner until June 30, 1947, and then on to June 30, 1951, and (2) a valid claim for relief pursuant to section 722 was filed, together with supplementary claims for refund of the full amount of the excess profits taxes paid in respect of the year 1942 on Form 843 and includes the entire $ 11,088.77, and this Court has it within its jurisdiction to determine any overpayment of excess profits taxes for the year 1942, regardless of the fact that an overassessment of excess profits tax for 1942 has been determined due to standard issue adjustments, petitioner having appealed from the disallowance notice of December 15, 1950.
The Tax Court's jurisdiction to grant refunds because of overpayments is defined in section 322 (d), as follows:
SEC. 322. REFUNDS AND CREDITS:
(d) Overpayment Found by Board. -- If the Board finds that there is no deficiency and further finds that the taxpayer has made an overpayment of tax in respect of the taxable 1954 U.S. Tax Ct. LEXIS 314">*329 year in respect of which the Commissioner determined the deficiency, or finds that there is a deficiency but that the taxpayer has made 21 T.C. 470">*478 an overpayment of tax in respect of such taxable year, the Board shall have jurisdiction to determine the amount of such overpayment, and such amount shall, when the decision of the Board has become final, be credited or refunded to the taxpayer. No such credit or refund shall be made of any portion of the tax unless * * *
Section 322 (d) is made applicable to excess profits taxes by the general provision of section 729 (a).
For each particular year there must be a deficiency determined initially for this Court to have jurisdiction to grant a refund under section 322 (d). Commissioner v. Gooch M. & E. Co., 320 U.S. 418">320 U.S. 418; Gress Manufacturing Co., 3 B. T. A. 977. Since there is no deficiency in petitioner's excess profits tax for 1942 as defined in section 271 (a), we have no jurisdiction under section 322 (d) to grant a refund.
An exception to the general rule above is the Tax Court's special jurisdiction under section 732 (a) to grant refunds for excess profits taxes pursuant to section 722. Petitioner contends that the $ 4,646.45 in question is refundable 1954 U.S. Tax Ct. LEXIS 314">*330 in a section 722 proceeding, as here. The $ 4,646.45 in question resulted from three adjustments made by respondent as follows:
(a) It decreased officers' salaries reported by petitioner by $ 3,500.00. This is an adjustment in favor of the respondent.
(b) It increased petitioner's average base period net income from $ 28,530.68 reported on said Form 1121 to $ 35,965.13 by use of the so-called "growth formula" under section 713 (f) of the Internal Revenue Code. This is an adjustment in favor of the petitioner.
And a third adjustment
increased petitioner's excess profits credit by $ 1,600.00 to reflect an additional excess profits credit for net capital additions of $ 20,000.00, computed on the basis of 8% of the $ 20,000.00 pursuant to the provisions of sections 713 (a) [1] (B) and 713 (g) of the Internal Revenue Code. * * *
These adjustments are so-called standard issue adjustments, that is, they are made under sections of the Code other than section 722. Petitioner has filed valid claims for relief under section 722 and this Court has 722 jurisdiction. Respondent concedes that petitioner is thereby entitled to a refund of $ 6,442.32, which he has allowed under section 722.
Respondent 1954 U.S. Tax Ct. LEXIS 314">*331 denies, however, that we have jurisdiction to give judgment for a refund of the $ 4,646.45 overassessment of petitioner's excess profits tax for 1942 due to standard issue adjustments. Among other cases which he cited in support of this contention is Mutual Lumber Co., 16 T.C. 370. In the Mutual Lumber Co. case we held that the Tax Court has no jurisdiction over the tax imposed under the general excess profits tax provisions of the Internal Revenue Code, where an overassessment was determined by the Commissioner in the tax, even though, in the same notice, the Commissioner rejected the 21 T.C. 470">*479 taxpayer's application for relief under section 722. In the Mutual Lumber Co. case, supra, we said:
The jurisdiction of this Court to consider and decide cases involving the alleged application of section 722 is given in section 732, not in section 272 (a) (1). It is just as separate from that given to decide a case involving the tax imposed under the general excess profits tax provisions of the Code as it is from that given to decide one involving income tax. Ideal Packing Co., 9 T.C. 346. This Court has no jurisdiction to decide the possible application of section 722 where the Commissioner determines 1954 U.S. Tax Ct. LEXIS 314">*332 a deficiency in excess profits tax but does not advise in the notice of the rejection of an application for relief under section 722. Uni-Term Stevedoring Co., 3 T.C. 917; Pioneer Parachute Co., 4 T.C. 27; American Coast Line, Inc. v. Commissioner, 159 Fed. (2d) 665, affirming 6 T.C. 67; Pohatcong Hosiery Mills, Inc. v. Commissioner, 162 Fed. (2d) 146, affirming a Tax Court memorandum opinion. Likewise, it has no jurisdiction to determine the tax liability under the general provisions of Subchapter E where the Commissioner, in one notice, rejects the application for relief under section 722 and determines an overassessment of excess profits tax imposed under the general provisions of Subchapter E. Cf. Ideal Packing Co., supra.The scheme of Subchapter E is that the correct tax liability under the general provisions, without the benefit of section 722, must first be fixed before the question of possible relief by refund or credit of a part of that amount can be considered. * * *
See also Packer Publishing Co., 17 T.C. 882, 898. In this latter case, we said:
There having been no determination of any deficiencies as to income tax or excess profits tax, jurisdiction is lacking to 1954 U.S. Tax Ct. LEXIS 314">*333 deal with the question whether such relief as is being granted would entitle petitioner to a larger deduction for its manager's bonus which consists of a percentage of profit after taxes. The proceeding in these respects must be dismissed. Mutual Lumber Co., 16 T.C. 370.
In H. Fendrich, Inc. v. Commissioner, 192 F.2d 916, the United States Court of Appeals for the Seventh Circuit disagreed with our holding in Mutual Lumber Co., supra, and reversed the Tax Court's order dismissing the petition of the taxpayer in the Fendrich case for want of jurisdiction of the taxpayer's petition insofar as it related to issues other than section 722 relief. We have carefully considered the Court's opinion in that case but are not convinced by it that we erred in the Mutual Lumber Co. case, supra, and, therefore, feel that we should follow our decision in Mutual Lumber Co. in the instant case. In the Mutual Lumber Co. case, the Commissioner had determined an overassessment of taxpayer's excess profits tax of $ 858.76 and in the notice sent to the taxpayer denied relief under section 722. The taxpayer abandoned any claim for relief under section 722 but sought refund of the overassessment in excess 1954 U.S. Tax Ct. LEXIS 314">*334 profits tax of $ 858.76, which had been determined by the Commissioner. We denied any judgment for refund because the Commissioner had not determined any deficiency in taxpayer's excess profits tax but, on the contrary, had determined an overassessment and we had no jurisdiction to direct refund of this overassessment.
21 T.C. 470">*480 In the instant case, the Commissioner has not determined a deficiency in petitioner's excess profits tax for 1942, but, on the contrary, has determined an overassessment in petitioner's excess profits tax for that year of $ 11,088.77, of which $ 4,646.45 is due to standard issue adjustments. In his joint notice the Commissioner has also given notice of disallowance of petitioner's claim under section 722 in part, and allowance in part. The amount allowed under section 722, as computed by the Commissioner, was $ 6,442.32. Petitioner was not satisfied with this amount and appealed to this Court, assigning errors which we have already enumerated, seeking greater relief under section 722 than the Commissioner had allowed. However, petitioner, at the hearing, abandoned its claim for greater relief under section 722 than the Commissioner has allowed but contends that 1954 U.S. Tax Ct. LEXIS 314">*335 we should enter a decision in its favor for the full amount of $ 11,088.77, which the Commissioner has determined represents overassessment in petitioner's excess profits tax for 1942. As already explained, $ 4,646.45 is attributable to adjustments made under standard issues and $ 6,442.32 represents relief granted under section 722 by using a constructive average base period net income of $ 43,500 in determining petitioner's excess profits credit, instead of $ 35,965.13 average base period net income which was computed by the growth formula.
For reasons we have already explained, we think we must hold that we have no jurisdiction to enter a judgment for refund of the $ 4,646.45 due to standard issue adjustments. As already pointed out, the Commissioner concedes that the $ 6,442.32 heretofore mentioned should be refunded as section 722 relief. The Commissioner also concedes that petitioner is entitled to section 722 relief of $ 3,221.16 for the year 1941. Petitioner, on its part, concedes that there are deficiencies in its excess profits tax for 1943 of $ 30,078.73, and for the year 1944 of $ 48,982.54.
For the reason that we have decided that we have no jurisdiction to enter judgment 1954 U.S. Tax Ct. LEXIS 314">*336 of refund for the $ 4,646.45 in question, it is unnecessary to decide respondent's contention that refund of the $ 4,646.45 is barred by the statute of limitations anyway.
Decision will be entered under Rule 50.
Kern, C. J., dissenting: I still feel that the majority opinion in Mutual Lumber Co., 16 T.C. 370, correctly construed the rather ambiguous statutory provisions governing our jurisdiction in circumstances discussed under the second issue of the instant case, and that the conclusions made in the Mutual Lumber Co. case would contribute to a more orderly disposition by this Court of the troublesome cases 21 T.C. 470">*481 arising under section 722. However, the actions taken in similar cases by the several Courts of Appeals referred to in Judge Opper's dissenting opinion force me to the conclusion that the orderly administration of justice requires us to abandon now the position taken by us in the Mutual Lumber Co. case. Therefore, I reluctantly note my dissent.
Opper, J., dissenting: As to the second issue, I must again dissent, this time on the authority of H. Fendrich, Inc. v. Commissioner, (C. A. 7) 192 F.2d 916; City Machine & Tool Co. v. Commissioner, (C. A. 6) 194 F.2d 535; 1954 U.S. Tax Ct. LEXIS 314">*337 and Claremont Waste Mfg. Co. v. Commissioner, C. A. 1) unreported (May 7, 1952). 1 See also Kemp Real Estate Co. v. Commissioner, (C. A. 2) 205 F.2d 236.
Furthermore, the present facts convincingly demonstrate the necessity of considering "standard issues" in connection with the rejection of claims for refund under section 722. It is only respondent's increase of petitioner's excess profits credit under section 713 which brings the case here to contest the denial even in part of the 722 relief. Of course the petitioner is not entitled under section 722 to any consideration with respect to abnormalities where the tax computed under other relief provisions, such as section 713, is not excessive or discriminatory. Irwin B. Schwabe Co., 12 T.C. 606; Homer Laughlin China Co., 7 T.C. 1325. But the over-all consequence is that petitioner has overpaid its tax to the full extent of the amount presently being claimed under section 722. And that claim on one theory or another is concededly valid. 1954 U.S. Tax Ct. LEXIS 314">*338 The failure to find an overpayment in the full amount, particularly on the ground of an absence of jurisdiction which three circuits now regard as erroneous, seems to me a grave miscarriage of justice.
Footnotes
*. Credited against assessment of excess profits tax for the year 1942.
**. Transferred from income tax for the year 1942.↩
1. In the last two cases, the Commissioner appears to have conceded error. See P-H 1952, par. 72,499, 52-2 USTC, par. 9429. In fairness to him, it must be said that he apparently does the same now.↩