Tax audit related query

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Parag (Querist)
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11 October 2017 Mr. X expired in Nov. 2016 having petroleum business Turnover 10 Crores. Supplier Company still making invoices in Mr. X name irrespective of fact known. For FY 2016-17 TAX Audit is required? Hw can i conduct audit and with whom DSC?

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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11 October 2017 You have to register someone as legal heir & then conduct audit using that person dsc.

Parag

Parag (Querist)
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12 October 2017 Mr. X had due to above 75 age, given already Power of Attorny on Rs. 100 Stamp to Mr. Y ( He is not in Blood relation ) for signing of all documents and dealing with supplier company. Should I conduct Audit with his DSC? As he is not Legal Heir but Authorised Power if Attorny Holder.

Parag

Parag (Querist)
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12 October 2017 Mam... plz let me know procedure to Register DSC of Legal Heir.

Parag

Parag (Querist)
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13 October 2017 plz let me know the procedure.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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26 July 2025 Your situation involves a **tax audit under Section 44AB** of a **deceased individual (Mr. X)** for FY **2016–17**, with turnover of ₹10 crore. Here's how you should proceed:

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## ✅ 1. **Is Tax Audit Required?**

Yes.
Since the turnover is ₹10 crore, **tax audit is mandatory under Section 44AB** for FY 2016–17, even if the assessee (Mr. X) passed away during the year.

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## ✅ 2. **Who Can File Return & Conduct Tax Audit?**

After the death of Mr. X:

* His **Legal Heir** is responsible for:

* Filing the return
* Getting the tax audit conducted
* A **Power of Attorney (PoA) holder**, even with a notarized or stamped agreement, **is not legally treated as a Legal Heir** for income tax purposes unless appointed as such by the Legal Heir or the court.

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## ❌ **Can You Use the PoA Holder’s DSC for Filing?**

No.
Even though Mr. Y has a valid **PoA**, he is **not a Legal Heir** and thus cannot file ITR or conduct audit using his DSC, unless:

* He is registered as a **representative assessee** u/s 160 by the department, or
* The **legal heir authorizes** him for such representation.

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## ✅ 3. **Correct Procedure: Register Legal Heir on Income Tax Portal**

To register the **legal heir** and file return/audit, follow this:

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### 🔹 **Step-by-Step: Register as Legal Heir on Income Tax Portal**

1. **Login** to [https://www.incometax.gov.in](https://www.incometax.gov.in) using the **Legal Heir’s credentials**.
2. Go to:
`My Account > Register as Representative > New Request`
3. Choose:

* **Request Type**: New Request
* **Category to Represent**: Deceased (Legal Heir)
4. Upload the following documents:

* Copy of **Death Certificate** of Mr. X
* Copy of **PAN Card of deceased**
* Copy of **PAN Card of legal heir**
* **Legal Heir Proof** (e.g., Legal Heir Certificate, Affidavit, Family Certificate, etc.)
* **Letter of Authorization** if legal heir authorizes someone else like PoA
5. Submit request. The department usually **approves in a few days**.

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## ✅ 4. **Who Should Sign Tax Audit Report (Form 3CD)?**

The **chartered accountant** conducting the audit will:

* Upload the **Form 3CD & 3CB**
* It must be **accepted by the Legal Heir** using their **registered DSC** on the portal.

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## 🧾 Summary:

| Step | Action |
| ----------------------- | ----------------------------------------------------------------------------- |
| Tax Audit Required? | ✅ Yes (₹10 crore turnover) |
| Who files return? | Legal Heir |
| PoA holder can file? | ❌ Not unless registered as representative |
| DSC to use? | Of the **registered legal heir** |
| Register Legal Heir at? | [incometax.gov.in](https://www.incometax.gov.in) > Register as Representative |
| Audit Form Signing | CA signs → Legal heir accepts via DSC |

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Let me know if you'd like a **sample letter for legal heir registration**, or a format for PoA authorization in this context.

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