Rules 2026s.515

Rule 261 of the Income-tax Rules, 2026

Rule 261 — Prescribed authority to order an inquiry. Made under s.515 of the Income-tax Act, 2025.

Where this rule sits

Rule 261 gives effect to Section 515 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.

← Rule 260 · Rule 262 →

What this rule does

The rule requires an inquiry before an authorised income-tax practitioner can be disqualified. An order disqualifying an authorised income-tax practitioner from representing an assessee under section 515(5)(b) shall be passed only after an inquiry, held as far as may be in accordance with rules 262 to 267.

Why it is there

Section 515(5)(b) allows a practitioner to be barred from representing assessees, which takes away his livelihood in that work, and the section does not itself lay down a procedure. This rule makes the inquiry a precondition of the order and points to rules 262 to 267 for how it is to be held.

Who it applies to

An authorised income-tax practitioner facing disqualification under section 515(5)(b)
The prescribed authority ordering and holding the inquiry

What this means in practice

The order cannot come first and the inquiry afterwards; the rule says the order shall be passed only after an inquiry. The procedure is that of rules 262 to 267, applied as far as may be, so those rules supply the steps and this one supplies the requirement. The rule bears on process, not on the grounds of disqualification, which remain in section 515(5)(b).

Where you meet this rule

A practitioner meets it as the inquiry that must precede any order disqualifying him from representing assessees.

The words themselves

An order disqualifying an authorised income-tax practitioner from representing an assessee under section 515(5)(b) shall be passed only after an inquiry, held as far as may be, in accordance with rules 262 to 267.

Rule 261, Income-tax Rules, 2026.

What people get wrong

Treating the inquiry as optional where the facts appear clear. The rule makes it a condition of the order.
Looking to this rule for the grounds of disqualification. Those are in section 515(5)(b); the rule fixes the process.
Overlooking rules 262 to 267. The inquiry is to be held, as far as may be, in accordance with them.

Read with

What this page does not tell you. It does not reproduce the rule. Everything above was written from the rule’s own text as the Income Tax Department publishes it — the text is here. A rule is subordinate legislation: it prescribes the method, the form or the period, and it cannot enlarge the charge the section imposes. Where a figure matters, read the sub-rule it comes from.