Liability of Authorised Signatory in case of a foreign company

Hi! Thanks for the question — this is an important issue to consider carefully.

Liability of an Authorized Signatory (especially for a Foreign Company) under Income Tax Law:

1. Authorized Signatory’s Role:

   • The authorized signatory acts as a legal representative for the company in all dealings with the Income Tax Department.

   • Signing income tax returns, forms, or responses using your DSC (Digital Signature Certificate) means you are certifying the correctness and completeness of the information submitted on behalf of that company.

2. Legal Liability:

   • If any non-compliance, misreporting, concealment, or fraud is found in the filings, the authorized signatory can be held liable under various provisions of the Income Tax Act.

   • Penalties, prosecution, and interest may be levied on the company and the authorized signatory.

   • The authorized signatory may be summoned or prosecuted for furnishing false information or for abetting tax evasion.

   • The Income Tax Department may hold you personally responsible for any defaults or irregularities.

3. No Relationship with the Company:

   • Even if you are not an agent, director, or employee, using your DSC to sign documents on their behalf creates a legal responsibility.

   • Simply being a “friend” or doing a favor does not absolve you of liability.

   • It may also have implications under the Information Technology Act for misuse of DSC.

4. Best Practices & Recommendations:

   • Avoid acting as an authorized signatory unless you have a formal, legally valid authorization (such as a Power of Attorney) from the company.

   • The foreign company should ideally appoint a proper authorized representative or agent who understands the legal responsibilities.

   • If you still want to help, consult a legal expert and get clear written indemnity and agreement from the company.

   • Keep in mind your personal and professional risk.

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