dissenting.
I am unable to agree with the court’s decision. It seems to me quite plain that, in the circumstances, the effect of the *474decision is contrary to the intent of Congress. The statutory allowance of the carryback of an unused excess profits tax credit was intended as a relief provision, a privilege granted to the taxpayer. The Internal Revenue Code, 26 U. S. C. 3780 (1946 Ed.) provided for a detailed application to be filed by the taxpayer within a specified period. It did not say that the taxpayer would lose its rights if it did not file such an application within the specified time. See Regulation 118,26 CFR Sec. 39.3780-1 (b) (2). But it certainly did not even remotely intimate that if the taxpayer did not file such an application, the Commissioner of Internal Revenue would nevertheless impose a carryback upon it, if that would increase the revenues.
The court’s opinion is based solely upon the letter of the statute, the word “shall” which is assumed to be a mandatory word. But the word has never been regarded by the courts as more than presumptively mandatory, and they have in numerous instances held that, in its context and circumstances, it meant “may”. See Words and Phrases, Vol. 39, page 122 ff. The instant case seems to me to call eloquently for such an interpretation.
Whitaker, Judge, joins in the foregoing dissent.
FINDINGS OK EAOT
The court, having considered the facts as stipulated by the parties, and the briefs and argument of counsel, makes findings of fact as follows:
1. During all of the time material hereto the plaintiff was and still is a Pennsylvania corporation with its principal office located at Neville Island, Pittsburgh, Pennsylvania. Its books of account are kept and its Federal income and excess profits tax returns for the calendar years 1944 and 1946 were filed on the accrual basis of accounting. Plaintiff’s income and excess profits tax liability upon its 1944 returns was finally determined by the Commissioner of Internal Revenue in the respective amounts of $812,029.81 and $5,600,-953.50, which were paid to the defendant.
2. Plaintiff’s 1946 return showed a net operating loss of $482,401.74 which, pursuant to an application filed by the *475plaintiff on March 15, 1947, on Treasury Form 1139, was allowed by the Commissioner as a tentative carryback to the year 1944 under provisions in Section 3780 of the Internal Bevenue Code of 1939. Such allowance resulted in refunds of $10,896.12 in income tax and $191,103.83 in excess profits tax.
3. Plaintiff’s excess profits credit for 1946, income method, was $1,010,487.88 and by reason of the net loss mentioned in finding 2, this entire amount was treated by the Commissioner as an unused excess profits credit available as a carryback to the year 1944. Plaintiff’s counsel at a conference held on March 21,1950, protested such a carryback, contending that an unused excess profits credit adjustment is a “relief” provision; that the taxpayer has a right to elect whether it wishes to apply for such a carryback adjustment; and counsel consented in writing to the tax adjustments resulting from an excess profits credit carryback from 1946 to 1944 subject to a reservation of a right to timely file an appropriate claim for refund for the additional 1944 net tax liability shown below which was paid as part of the amount of $812,029.81 mentioned in finding 1.
4. Because of the 80% limitation under Section 710 (a) (1) (B), which existed before and after the application of the unused excess profits credit carryback of $1,010,487.88 from 1946 to 1944, there was no change in the net effect thereof for 1944 before the application of the 10% post-war credit. However, inasmuch as the excess profits tax within such limitation was reduced in the amount of $404,195.16, the post-war credit was reduced accordingly in the amount of $40,419.52 with a consequent increase in the net tax liability in such amount.
This is shown'by the following:
After Before Increase carryback carryback or decrease
80% of Surtax Net In-come_,_$7,053,245.30 $7,053,245/30 None
Income Tax_ 812,029.81 407,834.65 $404,195.16
Excess Profits Tax_ 6,241,215.49 6,645,410.65 (404,195.16) Post-war Credit Sec-
' tion 784, I. R. C_ 624,121. 55 664, 541. 07 40, 419.52
*476■ After Before Increase Net of Excess Profits ■ carryback carryback or decrease
Tax-$5,617,093.94 $5,980, 869. 58 ($363,775. 64)
Total Tax Liability-. 6,429,123.75 6,388,704.23 40,419.52
5. Plaintiff timely filed a formal claim for refund of the-additional tax of $40,419.52 collected for the year 1944 as a result of the carryback from 1946 upon the stated ground that taxpayer was “erroneously compelled to take a credit under section 26 (e) I. E. C. of an amount equal to an adjusted excess profits net income determined after application as carryback to 1944 of an unused excess profits credit for 1946, although taxpayer did not ask for the application of said carryback, and affirmatively resisted same.” Such refund claim was disallowed in full and plaintiff so notified by registered letter dated November 16,1951.
CONCLUSION OE LAW
Upon the foregoing findings of fact, which are a part of the judgment herein, the court concludes as a matter of law that the plaintiff is not entitled to recover, and the petition is therefore dismissed.