Income Tax Returns Filed During Lifetime Are Conclusive Proof of Deceased’s Income in Motor Accident Claims

Income Tax Returns Filed During Lifetime Are Conclusive Proof of Deceased’s Income in Motor Accident Claims

The claimants, parents of the deceased, filed a claim under Section 166 of the Motor Vehicles Act after their son died in a road accident caused by rash and negligent driving of a motorcycle. The deceased was a self-employed goldsmith. The Motor Accident Claims Tribunal assessed his income at Rs. 10,000 per month and awarded compensation of Rs. 15,05,000.

Aggrieved by the assessment of income, the claimants appealed, contending that the Tribunal failed to rely on income tax returns filed by the deceased during his lifetime.

Main Issue: Whether income disclosed in income tax returns filed during the lifetime of a self-employed deceased must be relied upon for computing compensation under the Motor Vehicles Act.

HC’s Decision: The Hon’ble High Court held that income tax returns filed during the lifetime of the deceased constitute authentic and statutory evidence of income and cannot be disregarded merely for want of bank passbooks. The Court ruled that once income tax returns are accepted by the Income Tax Department and verified through official evidence, the Tribunal should not reassess income on a notional basis.

The Court recalculated compensation by adopting the annual income shown in the income tax return for AY 2014-15, added future prospects, applied the appropriate multiplier, and enhanced the compensation to Rs. 39,00,000 with interest at 6% per annum. Thus, the award of the Tribunal was modified.

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