Chapter XVI - Procedure for Assessment
Section 272
Section 272: power of Joint Commissioner to issue directions in certain cases
Section 272 lets a Joint Commissioner step into a pending assessment - on their own initiative, on a reference from the Assessing Officer, or on the assessee's own application - and issue binding directions to guide how the Assessing Officer completes the assessment.
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Need advice on Section 272?
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) A Joint Commissioner may, on his own motion or on a reference being made to him by the Assessing Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may—
(a) issue such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment; and
(b) such directions shall be binding on the Assessing Officer.
(2) No directions which are prejudicial to the assessee shall be issued under sub-section (1) without giving an opportunity of being heard to the assessee.
(3) For the purposes of this section, no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be a direction prejudicial to the assessee.
Introduction
The record must concern an assessment that is still pending. The Joint Commissioner can examine it on their own motion, on an Assessing Officer's reference or on the assessee's application, and can direct the Assessing Officer when guidance is necessary or expedient.
Key takeaways
Pending assessments only
Section 272 applies when an assessment proceeding is pending and its record is called for examination.
Three ways to bring the case forward
The Joint Commissioner may act on their own motion, an Assessing Officer's reference or an assessee's application.
Directions bind the Assessing Officer
Directions issued for completing the assessment are binding; a direction prejudicial to the assessee requires an opportunity of being heard.
Investigation directions are treated differently
A direction about the lines of investigation is not deemed prejudicial for this section merely because it guides the enquiry.
When directions can be issued
A Joint Commissioner may, on their own motion, on a reference from the Assessing Officer, or on an assessee's application, call for and examine the record of any pending assessment proceeding. If, having regard to the nature of the case, the amount involved, or any other reason, the Joint Commissioner considers it necessary or expedient, they may issue directions for the Assessing Officer's guidance to complete the assessment - and such directions are binding on the Assessing Officer.
Hearing required for prejudicial directions
No direction that is prejudicial to the assessee can be issued without first giving the assessee an opportunity of being heard.
Investigation directions are not 'prejudicial'
For this section, a direction about the lines on which an investigation connected with the assessment should be conducted is not deemed to be a direction prejudicial to the assessee (and so does not by itself require a prior hearing).
Step-by-step flow for directions by a Joint Commissioner under Section 272
- 1
Is an assessment pending?
Section 272(1) covers only proceedings in which an assessment is pending.
- No: Section 272 cannot be used.
- Yes: Go to the next step.
- 2
How does the matter reach the Joint Commissioner?
On his own motion, on a reference by the AO, or on an application by the assessee. He may call for and examine the record.
- 3
Is it necessary or expedient to issue directions?
Having regard to the nature of the case, the amount involved or any other reason.
- No: No directions are issued; the AO completes the assessment in the ordinary way.
- Yes: Go to the next step.
- 4
Is the proposed direction prejudicial to the assessee?
A direction only on the lines on which an investigation should be made is not deemed prejudicial (Section 272(3)).
- Yes: The assessee must be given an opportunity of being heard first (Section 272(2)). Go to the next step.
- No: No hearing is required. Go to the next step.
- 5
The AO completes the assessment following the directions
Directions under Section 272(1)(a) are binding on the AO (Section 272(1)(b)).
Practical checklist
Do
- If requesting Joint Commissioner directions, identify the pending assessment and the issue requiring guidance.
- Ask for an opportunity to be heard before any proposed direction that would prejudice the assessee.
Avoid
- Assume the Joint Commissioner’s direction is optional for the Assessing Officer.
Illustrative example
Worked example: two directions in one pending assessment
Hypothetical facts (illustration only, not a real taxpayer): A company's assessment is pending. It has claimed an expense of ₹25 lakh paid to a related vendor (amount assumed for illustration). The company applies to the Joint Commissioner under Section 272(1), asking for guidance to the AO because the issue is complex.
Calling for the record
The Joint Commissioner examines the record and considers directions expedient given the nature of the issue.
Investigation direction
He directs the AO to verify the vendor's bank statements. This concerns the lines of investigation, so it is not deemed prejudicial (Section 272(3)) and needs no prior hearing.
Prejudicial direction
He also proposes directing the AO to disallow the ₹25 lakh. This is prejudicial, so the company must be heard before it is issued (Section 272(2)).
Binding effect
Whatever directions are finally issued bind the AO, who completes the assessment accordingly (Section 272(1)(b)).
Outcome
- The company has a right to be heard on the disallowance direction, but not on the verification direction.
- An assessee's own application can start the Section 272 process.
Frequently asked questions
Are a Joint Commissioner's directions binding on the Assessing Officer?
Yes - Section 272(1)(b) makes such directions binding on the Assessing Officer.
Do I get a hearing before a direction that harms my case is issued?
Yes - no direction prejudicial to the assessee can be issued without giving the assessee an opportunity of being heard, except for directions purely about the lines of investigation, which are not treated as prejudicial.
Can I ask the Joint Commissioner to review my pending assessment?
Yes - Section 272(1) allows the Joint Commissioner to call for the record on the Joint Commissioner's own motion, on a reference from the Assessing Officer, or on the assessee's own application.
Need help applying this provision to your situation?
Get help with your pending assessmentLast updated 9 October 2026