Rule 263 of the Income-tax Rules, 2026

Where this rule sits

← Rule 262  ·  Rule 264 →

What this rule does

The rule provides for the appointment of an Inquiry Officer. The prescribed authority shall, unless it proposes to conduct the inquiry itself, appoint an Inquiry Officer, not below the rank of an Assistant Commissioner of Income-tax, to conduct the inquiry, and shall inform the authorised income-tax practitioner of the appointment of such an Inquiry Officer.

Why it is there

An inquiry into an authorised income-tax practitioner needs someone to conduct it, and the person whose conduct is in question is entitled to know who that is. The rule settles both: the prescribed authority may keep the inquiry or hand it to an officer of at least a stated rank, and either way the practitioner is told when an Inquiry Officer is appointed.

Who it applies to

• The prescribed authority, which either conducts the inquiry itself or appoints an Inquiry Officer
• An officer not below the rank of Assistant Commissioner of Income-tax appointed as Inquiry Officer
• The authorised income-tax practitioner who is the subject of the inquiry

The figures, and what each one turns on

What this means in practice

There are only two ways an inquiry can be conducted: by the prescribed authority itself, or by an appointed Inquiry Officer of at least the stated rank. The rank is a floor, so a more senior officer may be appointed but a junior one may not. The intimation to the practitioner is not discretionary — the authority shall inform him of the appointment — so an inquiry conducted by an officer whose appointment was never communicated departs from the rule. What the inquiry is into, and what follows from it, are matters outside this rule.

An example

The prescribed authority decides not to conduct an inquiry into an authorised income-tax practitioner itself and appoints a Joint Commissioner of Income-tax as Inquiry Officer, which is above the floor the rule sets. It then informs the practitioner of that appointment. An Income-tax Officer could not have been appointed, being below the rank of Assistant Commissioner of Income-tax.

Where you meet this rule

An authorised income-tax practitioner meets it in the communication naming the Inquiry Officer at the start of an inquiry into his conduct; a taxpayer does not meet it at all.

The words themselves

What people get wrong

• Assuming an Inquiry Officer must always be appointed. The prescribed authority may conduct the inquiry itself.
• Appointing an officer below the stated rank. The Inquiry Officer must be not below the rank of an Assistant Commissioner of Income-tax.
• Treating the intimation as a courtesy. The rule requires the prescribed authority to inform the authorised income-tax practitioner of the appointment.