The Draft Income-tax Rules, 2026, continue to bring procedural clarity to assessment-related powers under the Income-tax Act. Rule 174 specifically prescribes the day and time during which Valuation Officers and their authorised officials may conduct inspections, in accordance with section 269(3) of the Act.
This provision is crucial for safeguarding taxpayer rights while enabling effective valuation proceedings.
When Can a Valuation Officer Conduct an Inspection?
Rule 174 allows inspections to be carried out:
- On any day other than a public holiday, and
- Only between 6:00 a.m. and 6:00 p.m.
By fixing a definite time window, the rule ensures that inspections are conducted during reasonable daytime hours, preventing arbitrary or intrusive visits.
Who Is Authorised to Carry Out Inspections?
Under Rule 174, inspection powers may be exercised by:
- The Valuation Officer, or
- Any engineer, overseer, surveyor or assessor authorised by the Valuation Officer through a written order.
This requirement of written authorisation ensures accountability and proper delegation of authority.
Scope of Inspection Powers
Within the prescribed time limits, the authorised officer may:
- Enter any land within the jurisdiction assigned to the Valuation Officer;
- Enter any land, building or other place belonging to or occupied by a person whose case has been referred for valuation; or
- Inspect any asset, property or investment in respect of which a valuation reference has been made.
These powers are strictly linked to cases where a formal reference has been made to the Valuation Officer, preventing unfettered access.
What Constitutes a Public Holiday?
Rule 174 clarifies that the term "public holiday" includes:
- Sundays, and
- Any other day declared as a public holiday by the Central Government through a notification in the Official Gazette.
This removes ambiguity and provides certainty to both tax authorities and taxpayers.
Why Rule 174 Matters
Rule 174 strikes a balance between:
- Administrative efficiency in valuation proceedings, and
- Protection of taxpayer privacy and convenience.
By clearly defining permissible days, time slots, authorised personnel and scope of inspection, the rule reduces the risk of procedural disputes and allegations of misuse of power.
Key Takeaway
Under Rule 174 of the Draft Income-tax Rules, 2026, inspections by Valuation Officers can be carried out only on non-holiday days between 6 a.m. and 6 p.m., by duly authorised officials and only in cases where a valuation reference exists. Taxpayers should be aware of these limits to ensure compliance while protecting their statutory rights.
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