Chapter XVI - Procedure for Assessment
Section 269
Section 269: estimation of value of assets by Valuation Officer
Section 269 gives the Assessing Officer the power to bring in an independent Valuation Officer to estimate the fair market value of an asset, property or investment relevant to an assessment or reassessment - regardless of whether the Officer is otherwise satisfied about the correctness of the assessee's accounts.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) The Assessing Officer may, for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including the fair market value, of any asset, property or investment and submit a copy of report to him.
(2) The Assessing Officer may make a reference to the Valuation Officer under sub-section (1) whether or not he is satisfied about the correctness or completeness of the accounts of the assessee.
(3) (a) For estimating the value, including the fair market value, of the asset, property, or investment, the Valuation Officer or any engineer, overseer, surveyor, or assessor authorized by such Valuation Officer, may, subject to any rules made in this regard and at such reasonable times, as may be prescribed,–– (i) enter any land within the limits of the area assigned to the Valuation Officer; or (ii) enter any land, building, or other place belonging to or occupied by any person in connection with whose assessment a reference has been made to the Valuation Officer; or (iii) inspect any asset, property, or investment in respect of which a reference has been made to the Valuation Officer. (b) The Valuation Officer or any engineer, overseer, surveyor, or assessor, may require any person in charge of, or in occupation or possession of, such land, building, or other place or such asset, property, or investment to afford the necessary facility to:— (i) survey or inspect such land, building, or other place or such asset, property, or investment; (ii) estimate its value; or (iii) inspect any books of account, document, or record relevant for the valuation of such asset, property, or investment and gather other particulars relating to it. (c) The Valuation Officer, engineer, overseer, surveyor, or assessor shall enter any land, building or place referred to in clause (a)(ii), or inspect any asset, property, or investment referred to in clause (a)(iii), with the consent of the person in charge of, or in occupation or possession of, such land, building, place, or asset, property, or investment, after providing such person at least two days’ notice in writing of his intention to do so. (d) If a person who, under this sub-section, is required to afford any facility to the Valuation Officer or the engineer, overseer, surveyor, or assessor, either refuses or evades to afford such facility, the Valuation Officer shall have all the powers as are vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters,— (i) discovery and inspection; (ii) enforcing the attendance of any person, including any officer of a banking company, and examining him on oath; (iii) compelling the production of books of account and other documents; and (iv) issuing commissions.
(4) The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the assessee may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the assessee.
(5) The Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment, if the assessee does not co-operate or comply with his directions.
(6) The Valuation Officer shall send the report of the estimate made under sub-section (4) or (5), to the Assessing Officer and the assessee.
(7) With a view to rectifying any mistake apparent from the record, the Valuation Officer may amend any report made by him, as per section 287.
(8) The Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the assessee an opportunity of being heard, take into account such report in making the assessment or reassessment.
(9) The Valuation Officer shall send the report referred to in sub-section (6) within six months from the end of the month in which the reference is made under sub-section (1).
(10) For the purposes of this Act,–– (a) the Central Government may appoint as many Valuation Officers, as necessary; and (b) subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, a Principal Chief Commissioner, or a Chief Commissioner, or a Principal Commissioner or a Commissioner may appoint as many engineers, overseers, surveyors and assessors as may be necessary to assist the Valuation Officers in the performance of their functions.
Introduction
Section 269 lets the Assessing Officer refer valuation of an asset, property or investment to a Valuation Officer in specified assessment situations.
The Valuation Officer’s inquiry and report are inputs to the statutory assessment process, and the owner should retain the evidence supporting value.
Key takeaways
Valuation reference
For an assessment or reassessment, the Assessing Officer may refer an asset, property or investment to a Valuation Officer, even without finding the accounts incorrect.
Assessee participates
The Valuation Officer considers evidence and gives the assessee a hearing opportunity before estimating value.
Report deadline
The report goes to both the Assessing Officer and assessee within six months from the end of the month of reference.
When a reference can be made
The Assessing Officer may, for the purposes of assessment or reassessment, refer the matter to a Valuation Officer to estimate the value (including fair market value) of any asset, property or investment, and the Valuation Officer submits a copy of the report to the Assessing Officer.
This power can be exercised whether or not the Assessing Officer is satisfied about the correctness or completeness of the assessee's accounts.
Powers of the Valuation Officer during valuation
The Valuation Officer (or an authorised engineer, overseer, surveyor or assessor) may, at reasonable times, enter land within their assigned area or belonging to/occupied by the person under assessment, and inspect the asset, property or investment referred to them.
They may require the person in charge of the property or asset to provide facilities to survey/inspect it, estimate its value, or inspect relevant books, documents or records.
Entry to a place, or inspection of an asset, requires the consent of the person in charge, after giving at least two days' written notice of the intention to do so.
If a person refuses or evades providing the required facility, the Valuation Officer has all the powers of a Civil Court under the Code of Civil Procedure, 1908, for discovery/inspection, enforcing attendance and examining witnesses on oath, compelling production of books/documents, and issuing commissions.
How the value is estimated
The Valuation Officer estimates the value after taking into account evidence the assessee produces and any other evidence gathered, giving the assessee an opportunity of being heard.
If the assessee does not cooperate or comply with directions, the Valuation Officer may estimate the value to the best of their judgment.
Reporting timeline and use of the report
The Valuation Officer must send the report of the estimate to both the Assessing Officer and the assessee, within six months from the end of the month in which the reference was made.
The Valuation Officer may amend any report to rectify a mistake apparent from the record, as per Section 287.
On receiving the report, and after giving the assessee an opportunity of being heard, the Assessing Officer may take the report into account in making the assessment or reassessment.
Appointment of Valuation Officers and support staff
The Central Government may appoint as many Valuation Officers as necessary. A Principal Chief Commissioner/Chief Commissioner/Principal Commissioner/Commissioner may, subject to service rules, appoint engineers, overseers, surveyors and assessors to assist the Valuation Officers.
Step-by-step flow for a Valuation Officer reference under Section 269
- 1
Does an assessment or reassessment need the value of an asset, property or investment?
The AO may refer it to a Valuation Officer to estimate its value, including fair market value (Section 269(1)), whether or not he is satisfied with the accounts (Section 269(2)).
- 2
Inspection and facilities
The Valuation Officer, or an engineer, overseer, surveyor or assessor he authorises, may enter land in his area, enter the assessee's land, building or place, and inspect the asset (Section 269(3)(a)). Entry to the assessee's land, building or place, and inspection of the asset, need the consent of the person in charge and at least two days' written notice (Section 269(3)(c)).
- Facilities given: Go to the next step.
- Facilities refused or evaded: The Valuation Officer has civil-court powers of discovery, attendance, production and issuing commissions (Section 269(3)(d)). Go to the next step.
- 3
How is the value estimated?
After considering the assessee's evidence and other evidence, and after hearing the assessee (Section 269(4)). If the assessee does not co-operate or comply, the value may be estimated to the best of his judgment (Section 269(5)).
- 4
Report sent to the AO and the assessee
Within six months from the end of the month in which the reference was made (Sections 269(6) and (9)). A mistake apparent from the record may be corrected as per section 287 (Section 269(7)).
- 5
Use of the report in the assessment
The AO may take the report into account only after giving the assessee an opportunity of being heard (Section 269(8)).
Practical checklist
Do
- Identify the asset and valuation date in the reference.
- Provide acquisition, improvement and market evidence relevant to the valuation.
Avoid
- Treat a valuation estimate as a final assessment order by itself.
Illustrative example
Worked example: valuing a commercial building
Hypothetical facts (illustration only, not a real taxpayer): In the assessment of Mr. Bhatia, the AO makes a reference on 20 June 2027 to a Valuation Officer for the fair market value of a building Mr. Bhatia owns. He has valued it at ₹1.8 crore. The Valuation Officer later estimates ₹2.1 crore. Both figures are assumed for illustration.
Reference
The AO can make the reference even though he has not found Mr. Bhatia's accounts incorrect (Section 269(2)).
Inspection
To enter the building, the Valuation Officer needs Mr. Bhatia's consent and must give at least two days' written notice (Section 269(3)(c)).
Estimate and report
He considers Mr. Bhatia's evidence, hears him, and sends the report to both the AO and Mr. Bhatia by 31 December 2027, six months from the end of June 2027 (Section 269(9)).
Use by the AO
The difference is ₹2.1 crore − ₹1.8 crore = ₹30 lakh. Before relying on the report, the AO must hear Mr. Bhatia (Section 269(8)). How any difference affects income depends on the provision under which the value is relevant.
Outcome
- Mr. Bhatia gets two hearings: one before the Valuation Officer and one before the AO.
- Section 269 deals with the process of valuation, not with the tax effect of the value.
Frequently asked questions
How long does a Valuation Officer have to submit their report?
Six months from the end of the month in which the Assessing Officer made the reference to them.
Can the Assessing Officer refer a valuation even if the accounts look correct?
Yes - Section 269(2) says this reference power can be exercised whether or not the Assessing Officer is satisfied about the correctness or completeness of the assessee's accounts.
Do I get advance notice before a Valuation Officer inspects my property?
Yes - entry for inspection requires the consent of the person in charge, after at least two days' written notice of the intention to enter or inspect.
Need help applying this provision to your situation?
Get help responding to an assessment or valuation referenceLast updated 10 October 2026