MISCELLANEOUS CASES DISMISSED ON DECEMBER 5, 1932 D-410. Lawrence W. Luellen. Infringement of patent. K-283. Curtiss Aeroplane & Motor Co. Infringement of patent. 41910. Frank Marra Co. Stevedoring services. 42055. George J. Smith et al. 41832. Herbert T. Foshay. Use of copyright. ON JANUARY 9, 1933 Salary in postal service. 41977. Earl Kilpatrick. Salary and expenses as prohibition agent. ABSTRACT OF DECISIONS OF THE SUPREME COURT IN COURT OF CLAIMS CASES UNITED STATES v. FACTORS & FINANCE CO. [73 C.Cls. 707; 288 U.S. 89] Certiorari to review a judgment allowing a claim based on overpayment of income and excess-profits taxes. Judgment was rendered in favor of the plaintiff in the court below. Upon certiorari the judgment was affirmed January 9, 1933, the principal facts and the holding of the court being as follows: 1. While a full examination of the taxpayer's affairs was being made by the Bureau for the purpose of determining the income and profits tax for 1917, the taxpayer filed a claim for refund stating only an amount to cover any overpayment that might be found, and not specifying the grounds. After the statutory period for filing claims had run, an amended claim was filed, setting forth the grounds in detail, with reasons why a special assessment should be made under sec. 210 of the Revenue Act of 1917, which permits such procedure if the Department is unable, in any case, satisfactorily to determine the amount of invested capital. Thereafter the Commissioner decided that the case was one for such special assessment, and, pursuing that method, found an overpayment in a stated amount; but he refused to refund, upon the ground that the first claim was too general and the second filed too late. Held: (1) That the first claim was subject to amendment until (3) The Commissioner's certificate that assessment should be under sec. 210 is binding in the absence of evidence impeaching his conclusion; and the taxpayer is entitled to recover the overpayment so found by the Commissioner. 2. There are clear and important differences between the provisions for special assessments made by sec. 210 of the Revenue Act of 1917, and those made by sec. 327 (d) of the Revenue Act of 1918. Mr. JUSTICE CARDOZO delivered the opinion of the Supreme Court. UNITED STATES v. MEMPHIS COTTON OIL CO. [75 C.Cls. 195; 288 U.S. 62] Certiorari to review a judgment for overpayment of income tax. Judgment was rendered in favor of the plaintiff in the court below. Upon certiorari the judgment was affirmed, January 9, 1933, the Supreme Court deciding: 1. A claim for a tax refund which has been seasonably filed, but which fails to conform to Treasury Regulations in that it omits to state the grounds upon which the refund is demanded, may be amended by specifying the grounds at any time before the claim in its original form has been finally rejected, though it be after the time when a wholly new claim would be barred by limitation. So held under sec. 1318, Revenue Act of 1921, as amended March 4, 1923, which provides that no suit for recovery shall be maintained in any court until a claim for refund has been duly filed with the Commissioner "according to the provisions of law in that regard and the regulations of the Secretary of the Treasury established in pursuance thereof "; where the regulation required that "all the facts relied upon in support of the claim should be clearly set forth under the oath "; and where the claim, originally exhibiting only the taxpayer's statement of amounts of net income, tax, previous payments and overpayment, was amended, before its final rejection on that ground, so that it set forth in detail the facts showing overassessment as they had been revealed by the Bureau's own investigation. 2. Rulings as to what amendments of pleadings may (or may not) by relation avoid the bar of an intervening limitation, and as to what, in that connection, is but a revised statement of the same cause of action and what the substitution of a new one, furnish helpful analogies, though subordinate to administrative considerations, in determining the effect of an amendment of a claim for refund before the Commissioner. 3. To give effect by relation to the amendment here in question harmonizes with the Commissioner's practice of reauditing returns when refunds are claimed (Lewis v. Reynolds, 284 U.S. 281), and particularly with his action in entertaining the original claim (instead of rejecting it promptly for defect of form), examining completely the taxpayer's business, and announcing that the overassessments so found would be rectified. 4. The function of a statute limiting the time within which claims may be presented is to give protection against stale demands; the function of a regulation making provision as to the form of claims is to facilitate research; the line dividing the two functions should be kept a sharp one. 5. Notice by the Deputy Commissioner to a taxpayer that his claim for refund would be rejected and that the rejection would be officially announced in a schedule to be approved thereafter, held, not a final rejection. Mr. JUSTICE CARDOZO delivered the opinion of the Supreme Court. |