United States ex rel. Dascomb v. Board of Tax Appeals of the United States , 16 F.2d 337 ( 1926 )

ROBB, Associate Justice.

Appeal from a judgment for tbe defendant in the Supreme Court of tbe District of Columbia dismissing tbe petition of tbe plaintiffs, appellants here, for a writ of mandamus to require the defendant, appellee here, to take jurisdiction of petitioners’ appeal from a decision of tbe Commissioner of Internal Revenue.

Tbe facts are not in dispute and are as follows: On November 18, 1924, tbe Commissioner notified plaintiff by registered mail that its claim for abatement (section 279 [a] of the Revenue Act of 1924, 43 Stat. 300, being Comp. St. § 6336Vezz[6]) would be rejected at tbe expiration of 30 days from tbe date of the notification. Within 30 days, on December 15, 1924, in accordance with tbe Regulations, plaintiff filed a protest with the Commissioner, submitted therewith new evidence under oath, and requested a conference. Under date of December 27, 1924, tbe Commissioner replied to this letter of protest, fixing a date for a conference. The Commissioner’s letter also contained tbe following :

“All data to be relied upon in connection with your protest, including affidavits as to facts and briefs of argument, should be filed at least five days prior to tbe date fixed for conference.”

Owing to tbe illness of counsel for plaintiff, an oral bearing was waived.

On June 3, 1925, tbe following communication, signed by tbe Commissioner, was sent, plaintiff by registered mail:

“Reference is made to your protest, dated December 15, 1924, against tbe allowance of your application for assessment of your profits tax under tbe provisions of section 328 of the Revenue Act of 1918, as set forth in bureau letter dated November 18, 1924. After a careful review of your protest and of all the evidence submitted in support of your contentions, you are advised that the bureau bolds that tbe relief given by tbe above-mentioned office letter is sufficient to correct any abnormalities of income or capital, as indicated by comparison with tbe representative concerns specified in section 328 of tbe Revenue Act of 1918. Accordingly, tbe conclusions set forth in tbe above-mentioned letter are sustained. Tour ease is therefore deemed closed.”

On July 29,1925, plaintiff filed its appeal with tbe defendant, but this appeal-was dismissed, on tbe ground that it was not filed within 30 days from November 18, 1924, tbe date of tbe Commissioner’s original letter. Insisting that tbe case was not closed until June 3, 1925, tbe date of tbe final notification, plaintiff filed its petition for mandamus.

Agreeably to section 1001 of tbe Revenue Act of 1924 (43 Stat. 339 [Comp. St. § 6371%d]), tbe Commissioner, with tbe approval of tbe Secretary, promulgated Regulations 65. Article 1211 of these Regulations authorized tbe protest that was filed in this ease. Tbe article required such protest to be referred to tbe Income Tax Unit. If tbe taxpayer and tbe unit are unable to agree respecting tbe amount of tbe deficiency, “or if tbe taxpayer files a protest, but fails to request a conference before tbe Income Tax Unit, and tbe unit, upon examination of tbe data submitted by the taxpayer, does not agree as to bis contentions, tbe letter of protest, together with tbe files of tbe casé, will be transmitted by tbe Income Tax Unit to tbe Solicitor of Internal Revenue for consideration. * * * Opportunity for a bearing before tbe Solicitor of Internal Revenue, or before such representative of bis office as be may designate, will be granted, if requested in tbe letter of protest, or within 20 days after the mailing of tbe copy of tbe letter of transmittal to tbe taxpayer. Tbe Solicitor of Internal Revenue, after consideration of tbe case, will submit bis recommendations to tbe Commissioner, and tbe taxpayer will be notified by registered mail of tbe Commissioner’s final determination.”

On May 22, 1925, tbe Commissioner, with tbe approval of tbe Secretary of tbe Treasury, promulgated T. D. 3708, amending article 1211- of Regulations 65, tbe material part of this decision reading as follows: “It appears advisable in tbe interests of simplification and efficiency to eliminate one of tbe three bearings which have been afforded to taxpayers prior to tbe final determination by tbe Commissioner, from which an appeal lies to tbe Board of Tax Appeals.”

This Treasury Decision, therefore, eliminated appeals to the Solicitor’s Office, but provided that “all protests pending in the Income Tax Unit and not actually referred to the Solicitor prior to the effective date hereof will be carefully considered and an opportunity afforded for a hearing in the Income Tax Unit, if a hearing has not already been held. After consideration of the protest by the Income Tax Unit, final determination will be made and the taxpayer notified thereof by registered letter.”

The theory of the defendant, as stated in the brief and oral argument, is that, because the letter of June 3, 1925, “does not change, modify, alter, or revoke the Commissioner’s decision on the abatement claim as set forth in the letter of November 18, 1924, nor allude to the claim, such letter can in no sense be deemed to be the statutory notice of the Commissioner’s decision thereon. All the letter purports to be is a courteous reply to the protest of the company against the Commissioner’s decision of November 18, 1924. ”

We are unable to concur in this view. Under the regulations of the bureau, plaintiff had a legal right to file its protest of December 15, 1924, to introduce additional evidence, and invoke the decision of the Income Tax Unit. This right was recognized by the bureau in the letter of December 27,1924, in which receipt of the protest was aeknowl-o edged and the request for a “conference” or hearing granted. The bureau’s letter of June 3, 1925, is clearly inconsistent with the present contention, for it refers to the protest already filed in the ease and contains the statement that, “after a careful review of your protest and of all the evidence submitted in support of your contentions,” the bureau adheres to the position theretofore assumed. The letter concludes with these significant words: “Your ease is therefore deemed closed.”

It is familiar law that a decision is not final, within the meaning of the statute providing for an appeal, until disposition of an application for rehearing or reconsideration seasonably made and entertained. St. Clair v. Conlon, 12 App. D. C. 161; Doyle v. District of Columbia, 45 App. D. C. 90; Texas P. R. Co. v. Murphy, 111 U. S. 488, 4 S. Ct. 497, 28 L. Ed. 492; Kingman v. Western Mfg. Co., 170 U. S. 675, 18 S. Ct. 786, 42 L. Ed. 1192; United States v. Ellicott, 223 U. S. 524, 32 S. Ct. 334, 56 L. Ed. 535. We rule, therefore, that the letter of June 3, 1925, marked the close of the ease by the Commissioner, and that the appeal was seasonably filed. That mandamus is the proper remedy is equally plain. Int. Com. Com. v. Humboldt Steamship Co., 224 U. S. 474, 32 S. Ct. 556, 56 L. Ed. 849; Louisville Cement Co. v. Int. Com. Com., 246 U. S. 638, 38 S. Ct. 408, 62 L. Ed. 914; Kansas City Ry. v. Int. Com. Com., 252 U. S. 178, 40 S. Ct. 187, 64 L. Ed. 517. In the Louisville Cement Co. Case the Interstate Commerce Commission contended, as does the defendant here, that an appeal had not been seasonably noted. The court found that the Commission had erred in its interpretation of the law and awarded the writ, saying:

“The unusual and purely fortuitous circumstance, that the character of this jurisdictional limitation on the power of the Commission chances to be such that the giving of a correct construction to it must result in determining the character of the decision, which the Commission must render when the case is returned to it, cannot affect the power of this court or that of the lower courts to define what that jurisdiction is under the act of Congress or the duty of the Commission to accept and act upon such definition when announced.”

The judgment is reversed and cause remanded.

Reversed and remanded.