*1175OPINION.
: There is presented to us for consideration only the question of whether, on April 8, 1925, the Commissioner was barred by the statute of limitations from asserting and proposing to assess income and profits taxes against this taxpayer for the calendar year 1918, or for any part of that year. Section 277 (a) (2) of the Keve-nue Act of 1924 is the statute of limitations governing the issue here presented and reads as follows:
The amount of income, excess-profits, and war-profits taxes imposed by the Act entitled “An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes,” approved August 5, 1909, the Act entitled “ An Act to reduce tariff duties and to provide revenue for the Government, and for other purposes,” approved October 3, 1913, the Revenue Act of 1910, the Revenue Act of 1917, the Revenue Act of 1918, and by any such Act as amended, shall he assessed within five years after the return was filed, and no proceeding in court for the collection of such taxes shall be begun after the expiration of such period.
The position of the Commissioner is set forth in the deficiency letter in the following language:
As no separate return was filed by you for the above-mentioned period the statute of limitations upon the assessment of the above deficiency for the period involved, as outlined in section 277 (a) (2) of the Revenue Act of 1924 does not apply.
When it became the duty of the corporate taxpayer to make income and profits-tax returns for the calendar year 1918, the Eevenue Act *1176of 1918 was in force, and its provisions defined the duties of corporate taxpayers in respect to the making of income and profits-tax returns. Section 239 of that Act provided:
That every corporation subject to- taxation under this title and every personal service corporation shall make a return, stating specifically the items of its gross income and the deductions and credits allowed by this title. The return shall be sworn to by the president,- vice president, or other principal officer and by the treasurer or assistant treasurer.
And section 240 (a) contained this provision:
That corporations which are affiliated within the meaning of this section shall, under regulations to be prescribed by the Commissioner with the approval of the Secretary, make a consolidated return of net income and invested capital for the purposes of this title and Title III, and the taxes thereunder shall be computed and determined upon the basis of such return.
Internal Eevenue Eegulations No. 45, published as T. D. 2831 under date of April 16, 1919, and purporting to be the authorized regulations of the Treasury Department respecting the administration of the provisions of the Eevenue Act of 1918, contained, in Article 634, the following provision:
Change in ownership during taxable year. — -When one corporation owns substantially all the stock of another corporation at the beginning of any taxable year, but during the taxable year sells all or a majority of such stock to outside interests not affiliated with it, or when one corporation during any taxable year acquires substantially all the capital stock of another corporation with which it was not previously affiliated, a full disclosure of the circumstances of such changes in ownership shall be submitted to the Commissioner. In accordance with the peculiar circumstances in each case the Commissioner may require separate or consolidated returns to be filed, to the end that the tax may be equitably assessed.
For the purposes of this appeal it is admitted that the only return made by F. A. Hall, Inc., for the year 1918 was the consolidated return described in the foregoing findings of fact, and, therefore, the issue here resolves itself into a determination of whether such consolidated return was the return required by section 239 of the Eevenue Act of 1918.
No substantial change was made in the language of this paragraph during the years when the Eevenue Act of 1918 and Eegulations 45 were in force. The first specific reference in the Department regulations calling for separate returns from affiliated corporations for any portion of a taxable year during which the affiliation did not exist, appeared in the following language:
In either case the subsidiary or subordinate corporation whose status is changed during the taxable year should make a separate return for that part of the taxable year during which it was outside of the affiliated group.
*1177which was added to article 634 of Regulations 62, prepared under the Revenue Act of 1921 and published under the approval date of February 15, 1922.
An examination of the form of income-tax return made and filed on April 13, 1919, as a consolidated return for the Universal Optical Corporation and F. A. Hall, Inc., shows conclusively that that return stated “ specifically ” the items of gross income and the items of deductions of F. A. Hall, Inc., for the calendar year 1918, as required by section 239 above quoted. The testimony shows that said form was signed and sworn to by E. J. R. Beattey, who was the then treasurer of said company, and thus was in substantial compliance with the statutory provisions respecting the making of income and profits-tax returns. The said form also complied with article 634 of Regulations 45 in respect to furnishing “ a full disclosure of the circumstances of such changes in ownership ” of taxpayer’s stock which had occurred during the year. The typed Schedule A-19 recites:
The F. A. Hall, Inc., #36 Garnet Street, Providence, Rhode Island, was purchased and taken over by the Universal Optical Corporation on August 1, 1918.
In typed Schedule A-23 it is said:
Net gain F. A. Hall, Inc., January 1, 1918 to July 31, 1918 [was] $7,746.34.
The same schedule recites:
The stock of the F. A. Hall, Inc., was purchased by the Universal Optical Company at an amount much in excess of its then book value on the strength of government contracts which later proved a loss largely through cancellation.
When the consolidated return on behalf of this taxpayer and its associated company was made and received by the Commissioner, there was then in effect a statute of limitations contained in the Revenue Act of 1918, section 250 (d), in the following language:
* * * the amount of tax due under any- return shall be determined and assessed by the Commissioner within five years after the return was due or was made.
So far as the record of this appeal shows, no steps were taken by the Commissioner to inquire concerning, or to investigate, the tax liability under the return as filed until on or about April 8, 1925, when the deficiency notice was mailed to the taxpayer — nearly six years after the filing of the return. There is nothing in the record which indicates that at any time during that six years the Commissioner either advised the taxpayer or called upon it in any manner to furnish a separate return for that part of the year 1918 during *1178which affiliation did not exist. The statutes of limitation exist only by virtue of legislative enactments, and the times when they begin to run and the conditions of their running must also be governed wholly by legislative enactments.
We have therefore arrived at the conclusion that, as to this taxpayer, in respect to its income and profits-tax return for the calendar year 1918, or any part thereof, the statute of limitations began to run on the day following the filing of the consolidated return, and that on April 8,1925, the Commissioner was barred by the provisions of section 277 (a) (2) of the Revenue Act of 1924 from assessing any deficiency in tax against said corporation for the year 1918.
There is no deficiency and it wfll be so ordered.
Teammell dissents.