Notification No. 20

Amendment of the Income-tax Rules under section 142 of the Income-tax Act, 1961

What this is

Notification No. 20 was published on 5 February 2008. Its subject is Amendment of the Income-tax Rules under section 142 of the Income-tax Act, 1961.

This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.

What it does

The Central Board of Direct Taxes, in exercise of the powers conferred by sub-section (2D) of section 142 of the Income-tax Act, 1961, makes the Income-tax (Third Amendment) Rules, 2008, inserting rule 14B in the Income-tax Rules, 1962 after rule 14A. The rule lays down guidelines for determining the expenses of a special audit. Every Chief Commissioner is to maintain a panel of accountants drawn from the persons referred to in the Explanation to sub-section (2) of section 288 for the purposes of sub-section (2A) of section 142. Where the Assessing Officer directs an audit under sub-section (2A) of section 142 on or after 1 June 2007, the expenses of and incidental to the audit, including the remuneration of the accountant and of the qualified, semi-qualified and other assistants engaged by him, shall be not less than rupees three thousand seven hundred and fifty and not more than rupees seven thousand five hundred for every hour of the period specified by the Assessing Officer under sub-section (2C) of section 142, that period being specified in terms of the hours required to complete the report. The accountant must maintain a time-sheet and submit it with his bill to the Chief Commissioner or Commissioner, who is to ensure that the hours billed are commensurate with the size and quality of the report.

Who it reaches

accountants appointed to conduct a special audit under sub-section (2A) of section 142
assessees directed to get their accounts specially audited
Chief Commissioners and Commissioners maintaining the panel and passing the accountant's bill
Assessing Officers specifying the period for the audit under sub-section (2C) of section 142

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.142	s.268
s.288	s.515

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

NOTIFICATION NO. 20/2008, DATED 5-2-2008
In exercise of the powers conferred by sub-section (2D) of section 142 of the Income-tax Act, 1961(43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income -tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Third Amendment) Rules, 2008.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962, after rule 14A, the following rule shall be inserted, namely :-
"14B Guidelines for the purposes of determining expenses for audit- (1) Every Chief Commissioner shall maintain a panel of accountants, out of the persons referred to in the Explanation to sub-section (2) of section 288, for the purposes of sub-section (2A) of section 142.

Where the Assessing Officer directs for audit under sub-section (2A) of section 142 on or after the 1st day of June, 2007, the expenses of, and incidental to, audit (including the remuneration of the Accountant, qualified Assistants, semi-qualified and other Assistants who may be engaged by such Accountant) shall not be less than rupees three thousand seven hundred and fifty and not more than rupees seven thousand and five hundred for every hour of the period as specified by the Assessing Officer under sub-section (2C) of section 142.

The period referred to in sub-rule (2) shall be specified in terms of the number of hours required for completing the report.

The Accountant referred to in sub-section (2A) of section 142 shall maintain a time-sheet and shall submit it to the Chief Commissioner or Commissioner, along with the bill.

The Chief Commissioner or the Commissioner shall ensure that the number of hours claimed for billing purposes is commensurate with the size and quality of the report submitted by the Accountant."

[F.No. 142/33/2007 - TPL(Pt.)]

What it changes

The rule numbers are the 1962 Rules’ own, as the notification names them. The right-hand column is the department’s own mapping into the Income-tax Rules, 2026, which renumbered nearly everything.

Rule of the 1962 Rules	Now, in the 2026 Rules
Rule 14B	rule 172
Rule 14A	rule 171

From when

the date of publication in the Official Gazette.

What to watch

The rules come into force from the date of their publication in the Official Gazette, but the hourly band applies to audits directed on or after 1 June 2007, a date earlier than the notification.
The band is Rs. 3,750 to Rs. 7,500 for every hour of the period specified by the Assessing Officer, so the period must be specified in hours and not merely in days or months.
The accountant must be one of the persons referred to in the Explanation to sub-section (2) of section 288 and on the Chief Commissioner's panel.
Payment turns on a time-sheet submitted with the bill, and the Chief Commissioner or Commissioner must be satisfied that the hours match the size and quality of the report.

Where you meet it

In a direction for special audit under sub-section (2A) of section 142 and in the fixing and payment of the auditor's remuneration by the Department.

What it names

Rules it names. Rule 14A of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 19/2022 [F. No. 370142/15/2022-TPL] / SO 1468(E) — Ministry of Finance 30 March 2022
Notification No. 109/2021 [F. No. 370142/27/2021-TPL (Part I)] / GSR 627(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(i)] 13 September 2021
Notification No. 25/2021 [F. No. 187/3/2020-ITA-I] / SO 1437(E) — New Delhi, the 31st March, 2021 31 March 2021
Notification No. 7/2021 [F. No. 370149/154/2019-TPL] / SO 742(E) — New Delhi, the 17th February, 2021 17 February 2021
Notification No. 79/2020 [F. No.187/2/2019-ITA-I]/ SO 3304(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 25 September 2020
Notification No. 65/2019 [F.No.187/2/2019-ITA-I] /SO 3279(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 13 September 2019

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What a notification is. A notification is made under a power the Act itself gives, and within that power it is law — unlike a circular, which only binds the department. Its reach is the reach of the enabling provision and no wider, and the date it carries decides from when it works.

Source: the Income Tax Department’s own published text — its page for this instrument.