Rule 173 — Jurisdiction of Valuation Officers as per section 2(110) read with section 269. Made under s.2(110), s.269, s.78, s.91 of the Income-tax Act, 2025.
Rule 173 gives effect to Section 2(110), Section 269, Section 78 and Section 91 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule distributes valuation work among Valuation Officers for the purposes of section 2(110) read with section 269.
Sub-rule (1) sets the structure. Clause (a) gives Regional Valuation Officers general supervision, within such areas as the Board may direct, over the work of District Valuation Officers, Valuation Officers and Assistant Valuation Officers. Clause (b) leaves it to the Board to direct the areas and the classes of assets, properties or investments in which District Valuation Officers, Valuation Officers and Assistant Valuation Officers perform the functions of a Valuation Officer. Clause (c) then allots work by value where functions in relation to buildings or lands, or rights in them, have been assigned in an area: by the Table, a District Valuation Officer takes assets valued at more than five crore rupees, a Valuation Officer takes those of more than one crore rupees and up to five crore rupees, and an Assistant Valuation Officer takes those up to one crore rupees. Clause (c) is expressly subject to sub-rules (5) and (6).
Sub-rules (2) to (4) say what "value" means for that allotment. Where the reference is made under section 78(2), it is the stamp duty value of the capital asset. Where the reference is made under section 91(1), it is the value claimed by the assessee. Otherwise it is the latest value declared in the return of income of the assessee for any tax year, and where no value is ascertainable from the return, the functions are performed in accordance with the direction of District Valuation Officers.
Sub-rules (5) and (6) allow work to be pulled upwards. The District Valuation Officer having jurisdiction in the area may himself perform the functions in relation to any asset in Table Sl. No. 2, and the Valuation Officer having jurisdiction may himself perform them in relation to any asset in Table Sl. No. 3, in each case if he considers it necessary or expedient for the proper and efficient management of the work of valuation. Sub-rule (7) provides that for sub-rule (1)(c) the value is that of the asset as a whole, whether owned by the assessee individually or jointly.
Section 2(110) read with section 269 uses the office of Valuation Officer without saying which of the several grades of that office handles which reference. The rule answers that with a value ladder, and then answers the prior question the ladder raises — what value is used to place a case on the ladder before anyone has valued the asset — by taking a figure already on record: the stamp duty value, the value claimed, or the latest value declared in the return.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Value of asset handled by a District Valuation Officer | More than five crore rupees | Where functions in relation to buildings or lands or rights in them have been assigned in the area under sub-rule (1)(b) | Sub-rule (1)(c), Table Sl. No. 1 |
| Value of asset handled by a Valuation Officer | More than one crore rupees and up to five crore rupees | Same assignment; subject to the District Valuation Officer taking the case up under sub-rule (5) | Sub-rule (1)(c), Table Sl. No. 2 |
| Value of asset handled by an Assistant Valuation Officer | Up to one crore rupees | Same assignment; subject to the Valuation Officer taking the case up under sub-rule (6) | Sub-rule (1)(c), Table Sl. No. 3 |
| Value used to place a reference under section 78(2) | The stamp duty value of the capital asset | For the purposes of sub-rule (1)(c) | Sub-rule (2) |
| Value used to place a reference under section 91(1) | The value claimed by the assessee | For the purposes of sub-rule (1)(c) | Sub-rule (3) |
| Value used in other cases | The latest value as declared in the return of income of the assessee for any tax year | Where no value is ascertainable from the return, the functions are performed in accordance with the direction of District Valuation Officers | Sub-rule (4) |
The bands are contiguous and there is no gap: exactly one crore rupees falls to the Assistant Valuation Officer under Sl. No. 3, which reads up to one crore rupees, and exactly five crore rupees falls to the Valuation Officer under Sl. No. 2, which runs up to five crore rupees. The value that fixes the band is not the valuation being sought but a figure already available — the stamp duty value on a section 78(2) reference, the value the assessee claims on a section 91(1) reference, and otherwise the latest declared value — so the outcome of the valuation cannot retrospectively change who should have done it. Sub-rules (5) and (6) run one way only: a senior officer may take up a case from the band below on his own view of efficient management, but nothing lets a case be pushed down. Sub-rule (7) prevents the bands being defeated by co-ownership, because the value taken is that of the asset as a whole whether it is owned individually or jointly.
A reference is made under section 78(2) in respect of a building whose stamp duty value is Rs 6.2 crore. Under sub-rule (2) that stamp duty value places the case, and being more than five crore rupees it goes to the District Valuation Officer under Table Sl. No. 1. Had the stamp duty value been Rs 4 crore the case would sit with the Valuation Officer, though the District Valuation Officer having jurisdiction could still take it up himself under sub-rule (5) if he considered it necessary or expedient for the proper and efficient management of the work of valuation. If the building were jointly owned in equal shares, sub-rule (7) would still place it by the value of the asset as a whole.
A taxpayer meets it when a reference for valuation is made in an assessment and a notice arrives from a particular Valuation Officer; the rule explains why that officer and not another is handling the case.
Regional Valuation Officers shall exercise, within such areas as the Board may direct, general supervision over the work of District Valuation Officers, Valuation Officers and Assistant Valuation Officers
The value of any asset, for the purposes of sub-rule (1)(c) shall be, where a reference is made under section 91(1), the value claimed by the assessee.
the value of the assets, properties or investments referred to therein shall be in respect of the asset as a whole, whether owned by the assessee individually or joint-ly
