Surface Combustion Corp. v. Commissioner

Order

ARUNDELL, J.: On May 23, 1945, respondent filed a motion to dismiss the above-entitled proceedings in so far as it prays for relief under section 722 of the I.R.C. Thereafter the cause came on for hearing at which time counsel for the respective parties orally argued the matter and thereafter filed written briefs. After due consideration, and for the reasons briefly stated in the attached memorandum, it is

ORDERED: That the petition be dismissed in so far as it relates to section 722 and claims for relief*114 thereunder.

Memorandum Sur Order

The Commissioner determined deficiencies in petitioner's excess profits taxes for the taxable years 1940 and 1941, and duly advised petitioner of his determination pursuant to section 729 (a) of the I.R.C. Thereafter, these proceedings were instituted with the Tax Court. The petitioner alleged error on the part of the Commissioner in making various adjustments and in the alternative it alleged that the Commissioner erred in refusing to grant relief under section 722 of the I.R.C. It appears that petitioner's claim for relief under section 722 had not been filed with the Commissioner at the time that the deficiencies in question were determined and due notice thereof mailed and, in fact, was not filed until some two months thereafter. No action on the claim for relief under section 722 has been made and no notice of disallowance pursuant to section 732(a) of the I.R.C. has been issued. As we pointed out in Uni-Term Stevedoring Co., Inc., 3 T.C. 917, and Pioneer Parachute Co., Inc., 4 T.C. 27, this Court is without jurisdiction to consider the matter of*115 relief under section 722 until a taxpayer's claim for relief under that section is first acted upon by the Commissioner and in case of its rejection in whole or in part an appropriate notice of the disallowance is sent to the taxpayer pursuant to the provisions of section 732(a) of the I.R.C.

It follows that this Court has no authority to consider the question of relief under section 722 prior to the rejection of the taxpayer's claim, and we have accordingly ordered the dismissal of the petition in so far as it relates to section 722 and claims for relief thereunder.