The opinion of the court was delivered by: EGAN
It is alleged that the defendants filed a false and fraudulent corporate income tax return on or about April 14, 1950. Criminal proceedings were begun by filing a complaint before the United States Commissioner on April 11, 1956. The complaint was sworn to by a Special Agent of the Internal Revenue Service. Service of the summons was thereafter made on Fred L. Rosenbloom, Esquire, a member of the firm of counsel for the defendants. No summons was ever served on the named defendants themselves.
The case was then presented to the next Grand Jury and before its discharge, the Grand Jury returned an indictment on the 8th of March, 1957 -- almost eleven months after the complaint was filed. The statute of limitations for this offense is six years.
The controversy presented by this case calls for a determination of which of two Codes is applicable, in that the offense was committed under the 1939 Code, while the proceedings were not begun until after the enactment of the 1954 Code.
Section 3748(a) of the 1939 Internal Revenue Code (26 U.S.C. § 3748 (1940) provides inter alia:
'* * * Where a complaint is instituted before a commissioner of the United States within the period above limited, (referring to the 6 year statute of limitations), the time shall be extended until the discharge of the grand jury at its next session within the district * * *'. (Comment within the brackets supplied.)
Section 6531 of the 1954 Code (26 U.S.C. 6531 (1955) states:
'* * * Where a complaint is instituted before a commissioner of the United States within the period above limited, (referring to the 6 year statute of limitations), the time shall be extended until the date which is 9 months after the date of the making of the complaint before the commissioner of the United States * * *'.
In the instant case the indictment was found 11 months after the complaint was made before the commissioner but before the discharge of the next Grand Jury.
In order to determine whether or not the 1954 Code took immediate effect with respect to the 9 month time period, it is necessary to examine other portions of the 1954 Code. Section 7851 of the new Code provides for the effective dates of the various provisions. There we find the following. Section 7851(a) (7) states:
'If the effective date of any provision of the Internal Revenue Code of 1954 is not otherwise provided in this section or in any other section of this title, such provision shall take effect on the day after the date of enactment of this title. If the repeal of any provision of the Internal Revenue Code of 1939 is not otherwise provided by this section or by any other section of this title, such provision is hereby repealed effective on the day after the date of enactment of this title.'(Emphasis supplied.)
Thus, if an examination of the 1954 Code reveals no provision for the effective date of the 'extension of time' section, then the 9 month period ( § 6531, 1954 Code) became effective on August 17, 1954 -- one day after the date of enactment. It is the Government's contention, however, that Congress did provide for the effective date of § 6531 when it enacted Section 7851(d):
'All periods of limitation, whether applicable to civil causes and proceedings, or to the prosecution of offenses, or for the recovery of penalties or forfeitures, hereby repealed shall not be affected thereby, but all suits, proceedings, or prosecutions, whether civil or criminal, for causes arising, or acts done or committed, prior to said repeal, may be commenced and prosecuted within the same time as if this title had not been enacted.'
The problem is thus pinpointed to the characterization to be given this extension of time granted in § 6531. The defendants maintain that this additional period must be construed as an 'administrative grace period', not within the language of § 7851(d) referring to 'periods of limitation.' On the other hand, the Government contends that the additional period is nothing more than an extension of the statute of limitations and therefore within ...