Yes we took the photo ourselves. They said we could take it ourselves. And yes we did provide Identity Declaration by an Australian citizen.
Below is immigration email to us on baby passport photo when we made enquiry regarding Citizenship by Descent application
'Thank you for your email.
You can lodge a Citizenship by descent application on-line https://immi.homeaffairs.gov.au/help-support/applying-online-or-on-paper/online and upload the following:
1. Obtain passport photos to be uploaded or take a face photo of the baby as attached parameters. If you have difficulty with this, you can take a photo of baby on a white background (e.g. sheet) with full face showing and eyes open (if possible) and upload that to the on-line application. It must be saved as a Jpeg version less than 500kb in size.'
All the best in your application Anna. Passport is next. It never ends.