Rule 265 — Order of the prescribed authority. Made under s.515 of the Income-tax Act, 2025.
Rule 265 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.
Sub-rule (1) requires the prescribed authority to consider the report of the Inquiry Officer and record its findings on each charge, and where it does not agree with the Inquiry Officer's findings, to record the reasons for its disagreement.
Sub-rule (2) provides that if the prescribed authority is satisfied, on the basis of its findings on the report, that the authorised income-tax practitioner is guilty of misconduct in connection with any income-tax proceedings, it shall pass an order directing that he shall be disqualified to represent an assessee under section 515(1) for such period as it may determine, and that his name shall be removed from the register for that period.
Sub-rule (3) requires the prescribed authority, while communicating its order under sub-rule (2), to furnish to the practitioner a copy of the report of the Inquiry Officer and a statement of its findings together with the reasons for disagreement, if any, with the Inquiry Officer's findings.
Disqualification takes away a practitioner's right to represent assessees under section 515(1), so the rule separates the person who inquires from the person who decides, and then constrains the decider. Findings must be recorded charge by charge, disagreement with the Inquiry Officer must be reasoned, and the practitioner must receive the report and the findings with the order — so the case against him and the reasons for departing from the inquiry are both visible when he decides whether to challenge it.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Period of disqualification | Such period as the prescribed authority may determine | On being satisfied that the practitioner is guilty of misconduct in connection with any income-tax proceedings; the rule sets no minimum or maximum | Rule 265(2) |
The rule fixes no length of disqualification. It leaves the period to the prescribed authority's determination, and the same period governs the removal of the name from the register, so both follow the order rather than any figure in the rule. Findings are required on each charge, which means a general conclusion of misconduct will not do where several charges were inquired into. The prescribed authority is not bound by the Inquiry Officer, but disagreement is expensive: sub-rule (1) requires reasons to be recorded, and sub-rule (3) requires those reasons to be furnished to the practitioner along with the report and the statement of findings when the order is communicated.
An Inquiry Officer reports on three charges against an authorised income-tax practitioner and finds two not made out. The prescribed authority disagrees on one of those, records its reasons, and holds him guilty of misconduct. Its order disqualifies him for the period it determines and directs removal of his name from the register for that period, and the practitioner receives with the order the Inquiry Officer's report, the statement of findings and the reasons for disagreement.
A practitioner meets it as the order of disqualification and the papers that come with it. An assessee meets it only in the consequence — that a person previously appearing for him is no longer entitled to represent him under section 515(1) for the period stated.
where it does not agree with the findings of the Inquiry Officer, shall record the reasons for its disagreement
it shall pass an order directing that the authorised income-tax practitioner shall be disqualified to represent an assessee under section 515(1) for such period as it may determine and his name shall be removed from the register for that period