Valuation Officer Reference in Assessment: Section 269 of the Income-tax Act, 2025
Under section 269 of the Income-tax Act, 2025, the Assessing Officer (AO) can send an asset, property or investment to a Valuation Officer (VO) to estimate its value, including fair market value, while assessing or reassessing your return. The VO must send the report to the AO and to you within six months from the end of the month in which the reference is made, and the AO can use it only after giving you an opportunity of being heard.
This guide covers when a reference can be made, what the VO can do on your premises, which officer handles which value band, and what you can do when a report reaches you. Every point is taken from section 269 and rules 173 and 174 of the Income-tax Rules, 2026 (law as amended by the Finance Act, 2026). Last reviewed against that text on 10 November 2026.
What is a Valuation Officer reference under section 269?
A "reference" is a written request from the AO to the Valuation Officer. Section 269(1) lets the AO make it for the purposes of assessment or reassessment, to estimate the value, including the fair market value, of any asset, property or investment. The VO then submits a copy of the report to the AO.
A Valuation Officer is a person appointed by the Central Government for this purpose (section 2(110) and section 269(10)(a)). Typical subjects are land, buildings and other property where the value declared in the books is in question.
Can the AO refer a case even if the accounts are correct?
Yes. Section 269(2) says the AO may make the reference whether or not he is satisfied about the correctness or completeness of the accounts. A clean set of books does not by itself stop a reference.
How does the process run from reference to assessment?
What can the Valuation Officer do on your premises?
Under section 269(3), the VO, or an engineer, overseer, surveyor or assessor authorised by the VO, may enter land in the VO's area, enter any land, building or place belonging to or occupied by the person whose assessment is involved, and inspect the asset that was referred. The person in charge must give the facility to survey, estimate the value and inspect books, documents or records relevant to the valuation.
| Safeguard | What the law says | Source |
|---|---|---|
| Notice | At least two days' written notice of the intention to enter or inspect | Section 269(3)(c) |
| Consent | Entry into a building or place, or inspection of an asset, is with the consent of the person in charge or in occupation | Section 269(3)(c) |
| Days and hours | Any day except public holidays (Sundays count as public holidays), between 6 a.m. and 6 p.m. | Rule 174(1), (2) |
| Authority of helpers | An engineer, overseer, surveyor or assessor acts under a written order of the VO | Rule 174(1) |
| If facility is refused or evaded | VO gets civil court powers: discovery and inspection, summoning and examining persons on oath, compelling books and documents, issuing commissions | Section 269(3)(d) |
Which officer values your asset? (rule 173)
Where the work for buildings, lands or rights in them has been assigned by the Board, rule 173(1)(c) decides who values the asset by its value:
| Value of asset | Officer |
|---|---|
| More than Rs 5 crore | District Valuation Officer |
| More than Rs 1 crore and up to Rs 5 crore | Valuation Officer |
| Up to Rs 1 crore | Assistant Valuation Officer |
Which value counts depends on the route. Under rule 173(4), for a reference under section 269 the value is the latest value declared in your return of income for any tax year. If no value can be found from any return, the work is done as directed by the District Valuation Officers. The value is for the asset as a whole, even when it is jointly owned (rule 173(7)). A District Valuation Officer can take over a Table Sl. No. 2 asset, and a Valuation Officer can take over a Sl. No. 3 asset, when it helps the efficient management of valuation work (rule 173(5), (6)).
Example 1: deadline for the VO report
The report is due six months from the end of the month of the reference (section 269(9)).
| Step | Case A | Case B |
|---|---|---|
| Date of reference | 10 June 2026 | 14 September 2026 |
| End of the month of reference | 30 June 2026 | 30 September 2026 |
| Add six months | 31 December 2026 | 31 March 2027 |
Assumption: both references are made in tax year 2026-27 for an assessment. The date of reference, not the date you learn of it, starts the clock.
Example 2: which officer for three properties
| Property | Value in latest return | Officer under rule 173(1)(c) |
|---|---|---|
| Shop in a town market | Rs 85,00,000 | Assistant Valuation Officer (up to Rs 1 crore) |
| Office floor | Rs 3,20,00,000 | Valuation Officer (above Rs 1 crore, up to Rs 5 crore) |
| Factory land and building | Rs 7,50,00,000 | District Valuation Officer (above Rs 5 crore) |
Assumption: the work for these buildings and lands in the area has been assigned to these officers under a Board direction, and a Rs 7.5 crore asset is owned jointly by two co-owners. The whole Rs 7.5 crore counts, not each share (rule 173(7)).
Real-life example: Ravi and the inspection notice
Ravi is assessed in tax year 2026-27. His AO refers a plot he owns to the VO. A surveyor authorised by the VO writes to Ravi saying he will visit on a Saturday at 7 a.m. The law requires at least two days' written notice and Ravi's consent, and rule 174 allows visits only between 6 a.m. and 6 p.m. on days that are not public holidays. A Saturday is not automatically a public holiday, since rule 174(2) names Sundays and notified days. If Ravi simply refuses without reason, section 269(3)(d) gives the VO civil court powers, so a reasoned reply with a convenient date is the safer course.
Real-life example: Meena and the report she disagrees with
Meena runs a small firm. The VO's report values her building higher than her books. She receives the report because section 269(6) requires the VO to send it to her as well. Before the AO relies on it, section 269(8) requires the AO to give her an opportunity of being heard. She prepares her evidence: purchase deed, comparable sale records and a note on the building's condition. If the VO finds an apparent arithmetic or factual slip in the report, the VO can correct it under section 287, the rectification provision (section 269(7)).
What if you do not cooperate?
Section 269(5) allows the VO to estimate the value to the best of his judgment when the assessee does not co-operate or comply with his directions. Before that, section 269(4) requires the VO to take into account the evidence you produce and other evidence he has gathered, after giving you an opportunity of being heard. Producing documents on time is the best way to keep the estimate evidence-based.
Does a pending reference extend the assessment time limit?
Yes. Section 286(3)(e) excludes, when computing the time limit for completing an assessment, the period from the date the AO makes the reference under section 269(1) to the date the AO receives the VO's report. So a long-running reference leaves the AO more calendar time to pass the order.
How is this different from the section 91 reference for capital assets?
Section 91(1) is a separate reference for finding the fair market value of a capital asset. The AO may use it where the claimed value follows a registered valuer's estimate but the AO thinks it is at variance with fair market value, where the FMV exceeds the claimed value by more than a prescribed percentage or amount, or where the nature of the asset makes it necessary. Section 91(2) applies section 269(3) to (8) to it, so inspection, hearing and report rules are the same. See our post on the capital gains reference.
Can a search officer also refer property to a Valuation Officer?
Section 247(9) lets the authorised officer, during a search or within sixty days of the last authorisation being executed, refer property to a Valuation Officer (or a registered valuer or other approved person) to estimate fair market value. That is a search-stage reference, separate from the assessment reference in section 269.
Common mistakes
- Ignoring the two-day notice. Missing the written notice means missing the chance to fix a date and prepare records.
- Treating a clean audit as protection. Section 269(2) allows a reference whether or not the accounts are accepted.
- Not collecting valuation evidence early. The VO weighs the evidence you produce, so deeds, sale instances and structure details help.
- Missing the hearing after the report. The AO must hear you before using the report (section 269(8)), but that is your chance to respond.
- Calculating the deadline from receipt. Section 269(9) counts from the end of the month in which the reference is made.
Quick reference
| Item | Rule |
|---|---|
| Who makes the reference | Assessing Officer, for assessment or reassessment |
| Report deadline | Six months from the end of the month of reference |
| Inspection notice | At least two days, in writing, with consent |
| Inspection hours | 6 a.m. to 6 p.m., not on public holidays (rule 174) |
| Report goes to | Assessing Officer and the assessee |
| Before AO relies on it | Opportunity of being heard |
Where this is in the Act
- Section 269(1), (2): reference by the Assessing Officer
- Section 269(3): entry, inspection and civil court powers
- Section 269(4), (5): estimation and best judgment
- Section 269(6) to (9): report, rectification under section 287, use by AO, six-month limit
- Section 269(10): appointment of Valuation Officers and their assistants
- Section 286(3)(e): reference period excluded from assessment time limit; section 91: capital asset reference; section 247(9): search-stage reference
- Section 2(110): definition of Valuation Officer
- Rule 173: jurisdiction and value bands; rule 174: inspection days and hours
For a CA firm, the hard part is tracking which clients have a reference pending and when each six-month period ends. Finexo's practice management software can hold these dates as client tasks and remind your team before they pass. It does not value assets or respond to notices for you.
Related reading: assessment procedure, scrutiny and best judgment assessment, and the reference to a Valuation Officer in capital gains cases.
This article explains the Income-tax Act, 2025 (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. It is general information, not tax advice. Confirm the position for a specific case with a qualified chartered accountant.
Frequently Asked Questions
What is a Valuation Officer reference in assessment?
It is a request by the Assessing Officer under section 269(1) asking a Valuation Officer to estimate the value, including fair market value, of an asset, property or investment for assessment or reassessment.
Within how many days must the Valuation Officer submit the report?
Section 269(9) gives six months from the end of the month in which the reference is made. A reference made on 10 June 2026 must be answered by 31 December 2026.
Can the Valuation Officer enter my property without notice?
No. Section 269(3)(c) requires consent and at least two days' written notice, and rule 174 limits visits to 6 a.m. to 6 p.m. on days other than public holidays.
Do I get a copy of the Valuation Officer's report?
Yes. Section 269(6) says the report goes to both the Assessing Officer and the assessee. The AO must also hear you before taking it into account under section 269(8).
What happens if I do not cooperate with the Valuation Officer?
The VO may estimate the value to the best of his judgment under section 269(5), and may use civil court powers such as summoning persons and compelling documents under section 269(3)(d).
Does the time a Valuation Officer takes extend the assessment deadline?
Yes. Under section 286(3)(e), the period from the AO's reference under section 269(1) until the AO receives the report is excluded when computing the time limit for completing the assessment.