DOUGLAS, J., dissenting. 353 U.S. their stock, as it was afterwards. As stated by the District Court, where a noncarrier is "already in indirect control of a carrier" and the transaction relied upon "still leaves the non-carrier in indirect control of such property, no acquisition by the non-carrier results from the merger." 138 F. Supp. 123, 127–128. The court that made that ruling had as one of its members the late Judge Frank, who had no superior when it came to an understanding of the ways of high finance and to an analysis of regulatory measures dealing with it. I see no answer to what Judge Frank and his colleagues concluded on this phase of the case. 1 That view of § 5 (2) is plainly reflected in the legislative history. This control over noncarriers who acquired control of carriers was introduced in 1933. Commissioner Eastman pointed out to Congress the evil which was to be remedied "holding companies have been bringing carriers under common control and hence combining them without any supervision or approval by the commission." The Senate Report stated that the amendment gave the Commission control over holding companies that "effect consolidations without approval of the commission." 2 To "acquire control" within the meaning of § 5 (2) means then to put under common control carriers that previously were separate. We would strain to find a construction which would enable holding companies to run for shelter under the Act merely because, within the system they control, there have been corporate rearrangements or readjustments that change the internal structure of the system. Alleghany points with alarm to the loopholes in the law that will be created if it is held that Alleghany did not "acquire" control in connection with the Bridge 1 Hearings, House Committee on Interstate and Foreign Commerce on H. R. 9059, 72d Cong., 1st Sess., p. 250. 2 S. Rep. No. 87, 73d Cong., 1st Sess., p. 1. 151 DOUGLAS, J., dissenting. Company merger and the acquisition of the stock of the New England carriers. No loopholes will be created. Central could do neither of those two things without the approval of the Commission, since § 5 (2)(a) requires Commission approval of many intra-system transactions by carriers. That is the force of the holding in New York Central Securities Corp. v. United States, 287 U. S. 12. The loophole that is created comes from granting Alleghany a carrier status. Then Alleghany escapes the far more rigorous supervision which is imposed on it by the Investment Company Act. The only other means by which Alleghany could have acquired a carrier status was in connection with financial transactions long since liquidated. Alleghany had a carrier status, granted it by the Interstate Commerce Commission, when it acquired the stock of the Chesapeake & Ohio R. Co. and two other carriers. That order, issued in 1945, gave it a carrier status "unless and until otherwise ordered" by the Commission. That order was terminated by the Commission on May 24, 1955. The approval of the preferred stock issue that is involved in this litigation did not come until later, viz. June 22, 1955. At that time it seems plain that Alleghany had no carrier status and could not obtain one on the basis of the intercorporate transactions on which it relies. I would affirm the judgment below. AUTOMOBILE CLUB OF MICHIGAN v. COMMISSIONER OF INTERNAL REVENUE. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT. No. 89. Argued March 6-7, 1957-Decided April 22, 1957. The Commissioner of Internal Revenue, by rulings in 1934 and 1938, exempted petitioner automobile club from income taxes as a "club" within the meaning of provisions corresponding to § 101 (9) of the Internal Revenue Code of 1939. In 1945, the Commissioner revoked his 1934 and 1938 rulings, which were based upon a mistake of law, and directed petitioner to file returns for 1943 and subsequent years. The Commissioner also determined that prepaid membership dues received by petitioner should be treated as income in the year received. The Tax Court sustained the Commissioner's determinations, and the Court of Appeals affirmed. Held: The judgment is affirmed. Pp. 181-190. 1. The Commissioner had power to apply the revocation retroactively to 1943 and 1944. Pp. 183–185. (a) The doctrine of equitable estoppel does not bar correction by the Commissioner of a mistake of law. P. 183. 2. In the circumstances of this case, the Commissioner did not abuse the discretion vested in him by § 3791 (b) of the 1939 Code. Pp. 184-186. (a) It is clear from the language and legislative history of § 3791 (b) that it confirmed the authority of the Commissioner to correct any ruling, regulation or Treasury decision retroactively, and empowered him, in his discretion, to limit retroactive application to the extent necessary to avoid inequitable results. P. 184. (b) Helvering v. Reynolds Co., 306 U. S. 110, distinguished. Pp. 184-185. (c) Having dealt with petitioner upon the same basis as other automobile clubs, the Commissioner did not abuse his discretion. Pp. 185-186. (d) The 2-year delay in proceeding with petitioner's case did not, in the circumstances, vitiate the Commissioner's action. P. 186. 3. In the circumstances of this case, assessment of tax deficiencies against petitioner for 1943 and 1944 was not barred by limitations under §§ 275 (a) and 276 (b) of the 1939 Code. Pp. 186-187. 180 Opinion of the Court. (a) The express condition prescribed by Congress was that the statute was to run against the United States from the date of the actual filing of the return, and no action of the Commissioner's can change or modify the conditions under which the United States consents to the running of the statute of limitations against it. P. 187. (b) Form 990 returns are not tax returns within the contemplation of § 275 (a) of the 1939 Code. Pp. 187-188. 4. The Commissioner's determination that the entire amount of prepaid dues received in each year by petitioner should be reported as income for that year (instead of being allocated over the following 12 months) did not exceed the permissible limits of the Commissioner's discretion under § 41 of the 1939 Code. Pp. 188 190. 230 F. 2d 585, affirmed. Ellsworth C. Alvord and Raymond H. Berry argued the cause for petitioner. With them on the brief were A. H. Moorman and Lincoln Arnold. John N. Stull argued the cause for respondent. With him on the brief were Solicitor General Rankin, Assistant Attorney General Rice, I. Henry Kutz and Joseph F. Goetten. MR. JUSTICE BRENNAN delivered the opinion of the Court. In 1945, the Commissioner of Internal Revenue revoked his 1934 and 1938 rulings exempting the petitioner from federal income taxes, and retroactively applied the revocation to 1943 and 1944. The Commissioner also determined that prepaid membership dues received by the petitioner should be taken into income in the year received, rejecting the petitioner's method of reporting as income only that part of the dues as was recorded on petitioner's books as earned in the tax year. The Tax Court sustained the Commissioner's determinations,' and 120 T. C. 1033. Opinion of the Court. 353 U.S. the Court of Appeals for the Sixth Circuit affirmed.2 This Court granted certiorari.3 The Commissioner had determined in 1934 that the petitioner was a "club" entitled to exemption under provisions of the internal revenue laws corresponding to § 101 (9) of the Internal Revenue Code of 1939,* notifying the petitioner that ". . . future returns, under the provisions of section 101 (9) . . . will not be required so long as there is no change in your organization, your purposes or methods of doing business." In 1938, the Commissioner confirmed this ruling in a letter stating: ". as it appears that there has been no change in your form of organization or activities which would affect your status the previous ruling of the Bureau holding you to be exempt from filing returns of income is affirmed . . Accordingly the petitioner did not pay federal taxes from 1933 to 1945. The Commissioner revoked these rulings in 1945, however, and directed the petitioner to file returns for 1943 and subsequent years. Pursuant to this 2 230 F. 2d 585. 3 352 U. S. 817. * Section 101 (9) provided as follows: "The following organizations shall be exempt from taxation under this chapter "(9) Clubs organized and operated exclusively for pleasure, recreation, and other nonprofitable purposes, no part of the net earnings of which inures to the benefit of any private shareholder . . . ." 53 Stat. 33, 26 U. S. C. (1934 ed., Supp. V) § 101 (9). The earlier statute sections were identical to the 1939 section. 52 Stat. 480 (1938); 49 Stat. 1673 (1936); 48 Stat. 700 (1934); 47 Stat. 193 (1932). 5 The letter of revocation stated that in order to qualify as a club under § 101 (9), the ". . . organization should be so composed and its activities be such that fellowship among the members plays a material part in the life of the organization . . . ." It was then stated that the previous rulings were revoked because "[t]he evidence submitted |