(dissenting) .
In my judgment, under the plain, unambiguous language of the statutory provisions involved, the taxpayer should prevail. The Treasury Regulations relied upon should not be sustained on the pretext that they are no more than a permissible interpretation or construction of such provisions. The government in its brief states, “Certainly, Congress did not intend any income from a trust should escape taxation unless definitely exempted.” The point is that the income in the instant case was by statute “definitely exempted,” and it is only by reason of the Treasury Regulations that it was “definitely” required to be reported. The government continues, “Obviously, the trust income herein is not definitely exempted and therefore will have to be reported some place in order that it be subjected to tax.” So, based on the premise that it should be reported someplace and being unable to find any place provided by Congress, the Commissioner promulgates the regulations contrary to the statutory provisions. This must be a novel approach in seeking to justify the regulations.
In June 1956, at the time the regulations were proposed, the Section of Taxation of the American Bar Association, through its committee on the Taxation of Estates and Trusts, transmitted to the Commissioner its comments on the proposed regulations. Inasmuch as I thoroughly agree with the views therein expressed, I take the liberty of quoting in part as follows:
“Sections 652(c) and 662(c) unequivocally provide that, if the taxable year of the beneficiary is different from that of the trust, the amount which the beneficiary includes in gross income ‘shall be based upon the amount of income of the trust for any taxable year or years of the trust ending within or with his taxable year.’ There are no exceptions in the statute. Thus, since the taxable year of the beneficiary will end with his death, he should include nothing under the statute with respect to any year of the trust which ends after his death. The regulations contain the statement that Sections *74652(c) and 662(c) of the Code do not apply to amounts paid to the beneficiary during the taxable year of the trust in which he dies. There is absolutely no statutory justification for this statement.”
The same committee included in its comments the further pertinent observation:
“Furthermore, the rule which the regulations purport to set forth with no statutory justification can result in the bunching of income in the final taxable year of the beneficiary. For example, let us assume that the beneficiary is on a calendar year and that the trust is on an January 31 fiscal year. The beneficiary dies on December 1, 1956. The regulations would require that the beneficiary’s last tax return include all of the income from the trust for its fiscal year 1956, plus the income of the trust payable to the beneficiary for the period from February 1, 1956 to December 1, 1956. This result is most unjust and is completely contrary to the statute.”
I would reverse the judgment.