(dissenting).

My disagreement is upon a point neither mentioned nor discussed by the Tax Court. It does not concern the 1948 ($30,466.86) note. But with respect to the $66,342.82 note, which was delivered in February, 1949, if the statute should be construed as I think it should, the admittedly unfair and unjust result reached in the opinion here would at least in part be avoided.

The section here in question reads: “(E) For the purposes of subparagraphs (A), (B), and (C), a taxpayer on the accrual basis shall be deemed to have made a payment on the last day of the year of accrual if the payment is on account of such taxable year and is made within sixty days after the close of the taxable year of accrual.” (1939 I.R.C., 26 U.S.C. § 23 (p) (1) (E).)

The Tax Court assumed, without bothering to discuss the matter, that this section required and made it mandatory, that the taxpayer, which was on the accrual basis, must treat the contribution as having been made on the last day of the preceding year simply because it was made within 60 days after the taxable year.

Petitioner asserts that the quoted provision is permissive and not mandatory. If petitioner is right in this, it should be permitted to deduct the whole amount of $66,342.82 in 1949, the year in which it was paid.

I think the provision is properly construed as permissive and that the whole purpose of the enactment as well as the Regulations all point in that direction; and I think any different construction renders the whole business absurd.

It is true the section uses the word “shall”; but it is elementary that this word does not always import “must”; often it is to be read as “may”. Richbourg Motor Co. v. United States, 281 U.S. 528, 534 , 50 S.Ct. 385 , 74 L.Ed. 1016 ; West Wisconsin Ry. Co. v. Foley, 94 U.S. 100, 103 , 24 L.Ed. 71 ; Cairo, & F. Railroad Co. v. Hecht, 95 U.S. 168 , *674 24 L.Ed. 423 ; First Western Savings and Loan Ass’n v. Anderson, 9 Cir., 252 F.2d 544, 548 . Here the Regulations on the section are couched in words of permissiveness. They provide: “(d) Deductions under § 23 (p) are generally allowable only for the year for which the contribution or compensation is paid, regardless of the fact that the taxpayer may make his return on the accrual basis. Exceptions are made in the case of over-payments as provided in subparagraphs (A), (C), and (F) of § 28(p) (1), and as provided by § 23(p) (1) (E), in the case of payments made by a taxpayer on the accrual basis within 60 days after the close of the taxable year of accrual. This latter provision is intended to permit a taxpayer on the accrual basis to deduct such accrued contribution or compensation, provided payment is actually made within 60 days after the close of the year of accrual.” [Regs. Ill § 29.23 (p)-l and Regs. 118 § 39.23(p)-l(d)]. (Emphasis mine.) 1

As noted in Mertens “Law of Federal Income Taxation” (Zimet and Diamond Revision) §§ 25 B.28 and 25 B.29, this section provides for an exception to the general rule that the deduction must be taken in the year of payment. The section gives in the case of these accrual method employers what Mertens calls a “grace period”. It is a common rule that where a statute makes that legal and possible which otherwise there would be no authority to do, it will be construed as permissive only, although using the word “shall”. 2

What makes the Commissioner’s construction seem absurd to me is that according to the Commissioner if a calendar year taxpayer made payment on March 1 of an ordinary year (the 60th day) this payment must be deemed made in the preceding year; but if the same taxpayer made his payment on March 2, then it is only deductible in the year when paid. Such is the ruling of the Bureau (Rev.RuI. 57-378, 1957-2 Cum. Bull. 268), with respect to the 1954 Revenue Code’s similar provision. 3

No legislative history relating to the initial insertion of this language in the Revenue Code is available to aid us in determining just why Congress added this section. But I can perceive no conceivable object to be obtained by compelling the taking of such a deduction in the preceding year. But if, as Mertens suggests in referring to this as a “grace period”, the purpose was to permit the taxpayer to take the deduction in the preceding year, then the enactment appears to have had a reasonable objective.

Judge STEPHENS’ opinion, I think, makes more manifest the correctness of my position. After noting that there is no legislative history to aid in the problem of construction here involved, that opinion proceeds to assume the existence of some legislative history or rationale. Says the opinion: “Very simply, the accrual basis taxpayer was thought to need more time to dig out the necessary information. * * * Sixty days was apparently thought to be a reasonable time for this purpose.” (Emphasis mine.) There is no indication as to who “thought” this. Neither Congress nor any committee of Congress ever expressed any such thought; quite the contrary as I shall show.

What this opinion has sought to do is to evolve some equitable considerations supposed to have been in the mind of *675 Congress. But the Supreme Court had told us, in no uncertain terms, that such an approach to determination of the Congressional intent is not permissible in income tax cases. This is a prime case for remembering that “general equitable considerations do not control the measure of deductions or tax benefits.” Lewyt Corp. v. Commissioner, 349 U.S. 237, 240 , 75 S.Ct. 736, 739 , 99 L.Ed. 1029 . As the Court there held, what controls is the “statutory language”. The statutory language is plain. It is found in the repetition, again and again, in Section 23 (p) (1) of the 1939 Code, of the positive provision: “In the taxable year when paid”. Thus start subdivisions (A), (B), (C) and (D). By this language the year of payment is named as the time for deduction in every case and in respect to every taxpayer. The year of accrual is immaterial and irrelevant. This was noted by the Court of Claims in the case of Russell Manufacturing Company v. United States, 175 F.Supp. 159, 162 , as follows: “As to the amounts of compensation which merely accrued in the fiscal year 1945, a deduction could not be allowed in that year in the face of a clear statutory provision that such compensation shall be deductible only in the taxable year when ‘paid’.”

As noted in the Regulation quoted above, this is the year of deduction “regardless of the fact that the taxpayer may make his return on the accrual basis.”

That Congress meant what it said when it used the words “In the taxable year when paid”, and that this referred both to cash and accrual basis taxpayers, without distinction, is plain from the language used in subdivision (i) under 23 (p) (1) (A). 4 Note the limitation to “5 per centum of the compensation otherwise paid or accrued during the taxable year”. Similar reference to accrual basis taxpayers is made in subsections (C) and (F). Thus all these paragraphs refer to both cash and accrual basis taxpayers, yet the deductions allowed are not of contributions “accrued”. They are in every case deductions of amounts “paid”, and “in the taxable year when paid”. If it were otherwise, these paragraphs would have stated “in the taxable year when paid or accrued”.

I find no justification whatever for Judge Stephens’ statement that “the reason for the difference in treatment must be found in the difference in accounting systems.” Congress plainly made the “taxable year when paid” the period for deduction without regard to accounting systems. The sole effect of subparagraph (E) was to give the accrual basis taxpayer an optional grace period, just as the Regulations quoted above make clear.

I would reverse and remand with directions to permit the deduction of the entire $66,342.82 in 1949, the year of its payment which, as we previously held, was by delivery of this note.

. A ruling referring to this section, Rev.Rul. 56-366, 1956-2 Cum.Bull. 976, refers to the section by saying: “ * * * as provided by section 23 (p) (1) (E) of the Code, a taxpayer on the accrual basis may make payment within 60 days after the close of the taxable year of accrual.”

. See cases cited in 82 C.J.S. Statutes § 380, p. 881, footnote 15.

. This is Title 26, Sec. 404(a) (6) in which the language is identical with that of the above quoted section except that the final two lines, referring to the time of payment read: “ * * * is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).”

. 23(p) (1) (A) through (i) is as follows: “In the taxable year when paid, if the contributions are paid into a pension trust, and if such taxable year ends within or with a taxable year of the trust for which the trust is exempt under section 165(a), in an amount determined as follows: (i) an amount not in excess of 5 per centum of the compensation otherwise paid or accrued during the taxable year to all the employees under the trust, but such amount may be reduced for future years if found by the Commissioner upon periodical examinations at not less than five-year intervals to be more than the amount reasonably necessary to provide the remaining unfunded cost of past and current service credits of all employees under the plan, * *