CERTIORARI TO THE COURT OF CLAIMS.
Hughes, Holmes, Van Devanter, McReynolds, Brandeis, Sutherland, Butler, Stone, Roberts
MR. JUSTICE ROBERTS delivered the opinion of the Court.
This was an action by respondent for the recovery of the amount of an admitted overpayment of income and war-profits taxes for the taxable year 1917, with interest.
In its return for 1917 respondent included the value of stock dividends received. February 28, 1923, it filed a claim for refund, alleging that the dividends in question should have been allocated to other years than 1917. The claim was rejected. Subsequently this court decided that stock dividends did not constitute income, as defined by the Sixteenth Amendment (Eisner v. Macomber, 252 U.S. 189). September 3, 1927, respondent filed a second claim for refund which it designated as an amended claim, and therein for the first time asserted that the dividends did not constitute taxable income. The Commissioner of Internal Revenue determined that the latter claim was barred by the statute of limitations and rejected it.
The respondent's position is that the second claim should be construed as an amendment of the first; but, if not, then, treating the second as an original claim, it was filed within the time required by law and should have been allowed. The Court of Claims overruled respondent's first contention, but held with it upon its second, and entered judgment in its favor. Upon the petition of the United States this court granted a writ of certiorari.
If the Court of Claims was right in its disposition of respondent's second contention we need not trouble ourselves with respect to the first. It is admitted that if the later claim for refund was filed in time the respondent should recover. The sums of which a refund is sought were not paid in cash, but consisted of a credit of an amount overpaid for other taxable years. Whether the claim was filed in due time depends, therefore, upon a determination of the date when the credit was allowed
within the meaning of the statutes. Section 252 of the Revenue Act of 1921 (42 Stat. 268) contains the following provision:
"That if, upon examination of any return of income made pursuant to . . . the Revenue Act of 1917, . . . it appears that an amount of income, war-profits or excess-profits tax has been paid in excess of that properly due, then, notwithstanding the provisions of section 3228 of the Revised Statutes, the amount of the excess shall be credited against any income, war-profits or excess-profits taxes, or installment thereof, then due from the taxpayer under any other return, and any balance of such excess shall be immediately refunded to the taxpayer: Provided, That no such credit or refund shall be allowed or made after five years from the date when the return was due, unless before the expiration of such five years a claim therefor is filed by the taxpayer: . . ."
The applicable portion of Section 284 (b) (1) of the Revenue Act of 1926 (44 Stat. 66) follows:
"No such credit or refund shall be allowed or made after . . . four years from the time the tax was paid in the case of a tax imposed by any prior Act, unless before the expiration of such period a claim therefor is filed by the taxpayer; . . ."
Under the quoted statutes the respondent was required to file its claim within four years from the date of the allowance of the credit. The petitioner asserts that the credit was allowed on February 9, 1923, when the Commissioner certified the overassessment to the Collector. The respondent insists that it was when the Commissioner signed the schedule of refunds and credits as reported by the Collector on September 6, 1923. The ...