Rao, 75, was administered the oath of office at Raj Bhavan by Governor H.R. Bhardwaj, filling up the Lokayukta post that has been lying vacant for over 17 months.
Asked by reporters about the charge soon after he was administered the oath office, Rao declined to respond.
On his plans as Lokayukta, he said: "You will see it in course of time."
Karnataka's chief justice between March 1999 and June 2000, Rao faces the same charge as his predecessor Shivaraj V. Patil, a former Supreme Court judge.
Patil quit as Lokayukta in September 2011, just a month after taking over following the row that he had acquired a house plot from Judicial Department Employees House Building Cooperative Society in violation of laws.
The Advocates Association of Bangalore (AAB) has been opposing Rao's appointment on the ground that he too has got a house plot in the Judicial Department Employees House Building Cooperative Society in violation of laws.
Interacting with the media on the margins of the function, Bhardwaj said he has not received any allegation against Rao.
Bangalore: Former chief justice of Karnataka high court Y. Bhaskar Rao, who Thursday took over as the state's Lokayukta (ombudsman), declined to respond to allegations that he had illegally obtained a house plot in Bangalore.
First Published: Thursday, February 14, 2013, 23:05