Rules 168 to 172 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rules 168 to 172 of the Income-tax Rules, 2026 name the insolvency professional as verifier, fix the notice authorities, put the special audit reports into Forms 100 and 101, and set the fee at Rs 3,750 to Rs 7,500 an hour.
The first of rules 168 to 172 — the insolvency verifier
For verification of a return under section 265 , "any other person" is the person appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator under the Insolvency and Bankruptcy Code, 2016 and the rules and regulations made under it. "Adjudicating Authority" takes its meaning from section 5(1) of that Code. The 1962 parallel is rule 12AA.
Once an insolvency professional is appointed, rules 168 to 172 put the verification of the return in his hands — and, because rule 167(3) ties the appeal's verification to the section 265 person, the appeal too. All three roles are covered: interim resolution professional, resolution professional and liquidator, so the verifier changes as the insolvency process moves through its stages.
Rule 169 — the verification wording
Information required by the Assessing Officer under section 268(1)(c) shall be verified in this manner:
"I declare that to the best of my knowledge and belief, the information furnished in the statement/statements is correct and complete and other particulars shown therein are truly stated."
The wording is prescribed, not indicative. It carries two distinct assertions — that the information is correct and complete, and that other particulars are truly stated — and a declaration that drops either limb does not follow the rule.
Rules 170 and 175 — who may issue the notice
| Rule | Notice under | Authority |
|---|---|---|
| 170 | Section 268(1), prescribed under section 268(3) | An income-tax authority not below the rank of Income-tax Officer, authorised by the CBDT to act as such for section 268(3) |
| 175 | Section 270(8) | An income-tax authority not below the rank of an Income-tax Officer, authorised by the CBDT to act as such for section 270(8) |
Both use the same two-part test — a minimum rank and a specific CBDT authorisation — and it is the same test rule 156 applies for section 259. Rank alone never suffices.
The two reports in rules 168 to 172
- The report of audit of the accounts of an assessee required under section 268(5)(i) shall be in Form No. 100.
- The report of inventory valuation required under section 268(5)(ii) shall be in Form No. 101.
The 1962 parallel is rule 14A. Two separate directions, two separate reports, two separate forms — an audit direction does not carry an inventory valuation with it, and vice versa.
The panel and the fee, the last of rules 168 to 172
Sub-rule (1): every Chief Commissioner of Income-tax shall maintain a panel of:
- accountants, out of the persons referred to in section 515(3)(b); and
- cost accountants, out of the persons referred to in section 268(13).
Sub-rule (2): where the Assessing Officer directs an audit under section 268(5)(i) or an inventory valuation under section 268(5)(ii), the expenses of and incidental to it — including the remuneration of the accountant or cost accountant, qualified assistants, semi-qualified and other assistants engaged by him — shall be:
| Floor | Ceiling | Basis |
|---|---|---|
| Rs 3,750 | Rs 7,500 | Both inclusive, for every hour of the period specified by the Assessing Officer under section 268(8), (9) or (10) |
Two features of rules 168 to 172 are easy to misread. The fee is not merely capped — it must be not less than Rs 3,750 an hour, so the department cannot appoint at a token rate. And the band covers the whole engagement cost, including qualified, semi-qualified and other assistants engaged by the accountant, not the signing professional's own time alone.
Sub-rule (3): the period shall be specified in terms of the number of hours required for completing the report — so the Assessing Officer fixes hours, and the rate then converts them into a cost.
Sub-rules (4) and (5) close the loop:
- the accountant or cost accountant shall maintain a time-sheet and submit it to the Chief Commissioner or Commissioner along with the bill; and
- that authority shall ensure that the number of hours claimed for billing purposes is commensurate with the size and quality of the report submitted.
Sub-rule (5) asks the Chief Commissioner or Commissioner to check that the hours billed are commensurate with the size and quality of the report. That is a substantive review, not an arithmetic one — a thin report supported by a long time-sheet invites reduction. A professional accepting a section 268(5) engagement should therefore keep the time-sheet contemporaneously and be able to relate the hours to identifiable work in the report.
Worked example
| Facts | Position |
|---|---|
| Company under liquidation files a return | Verified by the liquidator — rule 168 |
| Information called for under section 268(1)(c) | Verified in the prescribed rule 169 wording |
| Notice under section 268(1) issued by an unauthorised Income-tax Officer | Not by the prescribed authority |
| Assessing Officer directs a special audit | Form No. 100 |
| Assessing Officer directs an inventory valuation | Form No. 101, separately |
| Period specified as 120 hours | Fee between Rs 4,50,000 and Rs 9,00,000 |
| Accountant engages two assistants | Their cost is within the hourly band, not additional |
| Bill submitted without a time-sheet | Not compliant with sub-rule (4) |
Compliance checklist
- Where an entity is in insolvency, have the return and any appeal verified by the appointed professional.
- Use the exact rule 169 wording for section 268(1)(c) information.
- Check the rank and CBDT authorisation of the officer issuing a section 268(1) or section 270(8) notice.
- Use Form No. 100 for audit and Form No. 101 for inventory valuation, separately.
- Confirm the appointee is on the Chief Commissioner's panel.
- Check the fee falls between Rs 3,750 and Rs 7,500 per hour.
- Treat assistants' cost as included in the hourly band.
- Maintain a contemporaneous time-sheet and submit it with the bill.
- Be able to relate hours to work visible in the report.
Common mistakes
- Management verifying the return after an insolvency professional has been appointed.
- Paraphrasing the verification wording.
- Billing assistants separately from the hourly band.
- Reconstructing a time-sheet at billing stage.
- Accepting a notice without checking the CBDT authorisation.