Rules 258 to 261 of the Draft Income-tax Rules, 2026 establish procedures for cancellation of registration certificates, removal of authorised income-tax practitioners from the official register, and disciplinary action under Section 515 of the Income-tax Act.
Rule 258 provides that a practitioner’s certificate of registration automatically stands cancelled if their name is removed from the register of income-tax practitioners. When such removal occurs, the concerned Chief Commissioner or Commissioner must notify the practitioner as well as other tax authorities and the Appellate Tribunal to ensure that the disqualification is formally communicated across the tax administration.
Rule 259 addresses cases where a certificate of registration was obtained through misrepresentation of essential facts. In such situations, the specified authority may order removal of the practitioner’s name from the register, but only after providing the individual a reasonable opportunity of being heard.
Rule 260 deals with removal of practitioners who become insolvent or incur penalties that disqualify them from representing taxpayers under the relevant statutory provisions. In such cases, the practitioner’s name will remain removed from the register during the period of disqualification and may be restored only after that period ends.
Rule 261 further provides procedural safeguards by requiring that any order disqualifying an authorised income-tax practitioner from representing an assessee must be preceded by an inquiry conducted in accordance with the prescribed rules. Collectively, these provisions create a structured disciplinary framework to ensure accountability, prevent misuse of professional status, and maintain integrity in representation before income-tax authorities.
Extract of Rule No. 258, 259 and 260, 261 of Draft Income-tax Rules, 2026
Rule 258
Cancellation of certificate
1. A certificate of registration shall stand cancelled when the name of the holder of the certificate is removed from the register under these rules.
2. When the name of the holder of the certificate is removed from the register, the Chief Commissioner or Commissioner maintaining the register shall notify the fact of such removal to the authorised income-tax practitioner concerned and also to other Chief Commissioners or Commissioners of Income-tax (who shall notify the fact of the removal to the income-tax authorities subordinate to them) and to the Appellate Tribunal.
Rule 259
Cancellation of certificate obtained by misrepresentation
1. If at any time the specified authority is satisfied that the certificate of registration was obtained through misrepresentation as to an essential fact he shall order the removal of the name of the income-tax practitioner from the register.
2. An order under sub-rule (1) shall not be passed unless the authorised income-tax practitioner has been given a reasonable opportunity of being heard regarding in the proposed removal.
Rule 260
Removal of name of authorised income-tax practitioner who is insolvent or on whom penalty has been imposed.
A person whose name has been entered in the register,–
a. his name shall be removed from the register during the period for which he is disqualified to represent an assessee in the circumstances as referred to in section 515(4)(b) or 515(4)(c); and
b. his name shall be re-entered only after the completion of the aforesaid period.
Rule 261
Prescribed authority to order an inquiry.
An order disqualifying an authorized income-tax practitioner from representing an assessee under Section 515(5)(b) shall be passed only after an inquiry, held as far as may be, in accordance with rules 262 to 267.
