Before MCLAUGHLIN, GANEY and SMITH, Circuit Judges.
MCLAUGHLIN, Circuit Judge.
This is an action for the refund of certain excise taxes paid for the calendar years 1951-1952. The problem presented arises out of the refund provisions of the 1939 Internal Revenue Code. It is sui generis, and has been eliminated under the 1954 Code.
During 1951 and 1952, John Walsonavich (hereinafter referred to as the taxpayer) was in the business of supplying television antenna service to the public. Pursuant to Section 3465(a)(2)(B) of the 1939 Internal Revenue Code and certain Revenue Rulings (See Rev. Ruling 88-C.B. 1953-1), the Commissioner assessed excise taxes against him in the amount of $12,446.67.*fn1 The taxpayer paid these taxes sometime in 1952, and there-after paid the tax due, concurrently for the years 1953-1956 and part of 1957.
On December 10, 1954, he entered into an extension agreement Form 872-B with the Commissioner of Internal Revenue.*fn2 This agreement was entitled "Consent Fixing Period of Limitations Upon Assessment of Miscellaneous or Excise Taxes". It provided in part that "the amount of said taxpayer's liability for Excise Tax-Wire Service tax * * * due for the period January through December, 1951, may be assessed at any time on or before June 30, 1956."
On March 14, 1956 a second agreement was made providing that the taxpayer's "liability for Leased Wire Excise Tax * * * due for the period January 1, 1951 to December 31, 1952 may be assessed at any time on or before June 30, 1957."
Meanwhile, the applicability of the leased wire excise tax to television antenna service was challenged in numerous instances and test cases initiated in this and the Fourth Circuit. Both courts of appeals decided that the leased wire excise tax did not apply to community television antenna service. Pahoulis v. United States, 242 F.2d 345 (3 Cir. 1957); Lilly v. United States, 238 F.2d 584 (4 Cir. 1956).
On January 28, 1957 the taxpayer filed his claim for refund. The Government refunded the taxes paid for the period 1953-1957 but on February 14, 1961, ultimately refused to refund the taxes for 1951 and 1952 as barred by the Statute of Limitations. The taxpayer then instituted this action in the United States District Court for the Eastern District of Pennsylvania. The Government moved to dismiss the complaint claiming that the refund claim was barred by the Statute of Limitations. The court granted the Government's motion and this appeal followed.
The excise taxes in issue were assessed under the 1939 Code, 26 U.S.C. § 3465(a)(2)(B) (1952) (war rates 26 U.S.C. § 1650 (1952)); and the taxpayer seeks a refund of the taxes paid as "erroneously or illegally assessed or collected." 26 U.S.C. § 3313 (1952). He claims that the extension agreement he made with the Commissioner tolled the four year Statute of Limitations for filing his refund claim. 26 U.S.C. § 3313 (1952).
Unlike the 1954 Code which provides for an assessment, collection and refund procedure, generally applicable to all taxes, Subtitle F, 26 U.S.C. § 6011 et seq. (1958), the 1939 Code provides for a separate treatment of income, profits, estate and gift taxes as distinguished from miscellaneous taxes, and the excise, import and temporary taxes. Jones v. Liberty Glass Co., 332 U.S. 524, 533, 68 S. Ct. 229, 92 L. Ed. 142 (1947).
That separate statutory treatment is here highlighted. Under the income tax provisions of the 1939 Code, Subtitle A, Chapter 1, a taxpayer must file his claim for refund within three years from the time the return was filed or within two years from the time the tax was paid. 26 U.S.C. § 322(b)(1) (1952); but if the taxpayer and the Commissioner agree to extend the time for assessment of taxes as provided in Section 276(b), (Title 26 U.S.C.) the time in which a claim for refund may be filed is likewise extended. 26 U.S.C. § 322(b)(3)(1952). Under the excise tax provisions of the 1939 Code, any claim for refund had to be presented to the Commissioner within four years after the payment of the tax. 26 U.S.C. § 3313 (1952). However, there was no express provision for waivers or extension agreements.
Under the 1954 Code, the Commissioner is authorized to enter into such agreements for the assessment of excise taxes, which by statute also extend the time for filing refund claims. 26 U.S.C. §§ 6501(c)(4), 6511(c)(1). These limitation-on-refund provisions, however, did not apply to excise taxes assessed under the 1939 Code. 26 U.S.C. § 7851(a)(6)(A), (B) and (D) (1958).
Nevertheless the Commissioner on December 10, 1954 (perhaps purporting to act under the 1954 Code, which became law in most respects August 16, 1954 (c. 736, 68A Stat. 915)) entered into an agreement with the taxpayer: "Fixing Period of Limitations upon Assessment of Miscellaneous or Excise Taxes." A refund claim filed at the time of the agreement would have been timely (26 U.S.C. § 3313 (1952)) but relying on the apparent effect of the agreement, as he argued below, the taxpayer was lulled into a sense of security that pursuant to Section 6511(c)(1), or some similar provision, he would be able to file a timely refund claim within the period of agreement.
The Government takes the position that although the assessment period was extended by the agreement, this, of itself, is insufficient to extend the period for filing a refund claim.*fn3 Since the Revenue Act of November 23, 1921 (c. 136, Section 250(d), 42 Stat. 227, 265), Congress has provided for waivers by taxpayers, which, if accepted by the Commissioner, extend the time within which the Commissioner may assess taxes. See 26 U.S.C. § 276(b) (1952) (1939 Code); See also the 1928 amendments to the Revenue Act of 1926: Act of May 29, 1928, c. 852, 45 Stat. 869, 870 (to be distinguished from waivers of time in which assessed taxes may be collected) 1939 Code, Section 276(c). This statutory provision was designed solely for the benefit of the Commissioner. See Commissioner v. Hind, 52 F.2d 1075 (9 Cir. 1931). In 1942, however, Congress brought mutuality to such extension agreements. 1939 Code, 26 U.S.C. § 322(b)(3) (1952). Section 322(b)(3) provides that where an extension agreement is made as provided in Section 276(b), it effects a tolling of the Statute of Limitations for the filing of refund claims. This mutuality of benefit to be accorded such extension agreements (reincorporated in Section 6501(c)(4) and 6511(c)(1) of the 1954 Code is overlooked by the Government. See Claremont Waste Mfg. Co. v. Commissioner, 238 F.2d 741, 746 (1 Cir. 1956). The Government, conceding that the waiver is not "completely ineffective", wishes to give it an effect, inconsistent with the present Congressional desire to accord mutuality to such extension agreements. It argues that the agreement was a contract, which on its face extended only the time of assessment. The Government asserts that it received as consideration additional time to consider further assessments, while the taxpayer received as consideration the benefit of the Commissioner's not making a hasty assessment or a jeopardy assessment. While this may be true as to future ...