Income Tax Return Accepted By Tax Authority Must Be Used To Assess Victim’s Income In Motor Accident Claims: Grants ₹39 Lakh Compensation
Sanchayita Lahkar
The Calcutta High Court Single Bench of Justice Biswaroop Chowdhury modified a motor accident compensation award and directed the insurer to deposit Rs. 39 lakh with 6% interest, payable to the deceased victim’s parents as claimants. The dispute centred on the correct assessment of the deceased’s income, after the tribunal declined to rely on income tax returns and assessed a lower monthly income. Holding that an income tax return accepted by the Income Tax Authority is an authentic basis to determine a victim’s income in such claims, the Court computed compensation on the last filed return.
The appellants were claimants in a proceeding under Section 166 of the Motor Vehicles Act arising from an accident that occurred on 23.12.2014 at around 10.30 PM. The deceased was standing on the footpath near Ramjungla Para when a motorcycle travelling at high speed in a rash and negligent manner struck him, causing his death on the spot. A police complaint was lodged and a case under Sections 279 and 304A of the Indian Penal Code was instituted against the driver. The deceased worked as a goldsmith and was earning Rs. 30,000 per month. The appellants, being his parents, claimed to be dependants on his income.
The vehicle owner filed a written statement but did not contest the matter. The insurance company contested the claim. The Tribunal assessed the monthly income of the deceased at Rs. 10,000 and awarded compensation of Rs. 15,05,000 with interest at 6% per annum. The appellants challenged the award on the grounds that the Tribunal failed to consider income tax returns for three consecutive years, particularly the return for AY 2014–2015 reflecting an income of Rs. 3,18,470. It was argued that the return had been filed during the lifetime of the deceased and corroborated through examination of an Income Tax Officer. The insurance company supported the Tribunal’s approach and submitted that insistence on bank passbooks was justified. The appellate court examined the evidence and heard both sides before proceeding to determine the matter.
The Court recorded that “while considering motor accidents claim the income of a victim who is a salaried person can be ascertained from the salary slip of the victim upon examining his employer. But in case of self employed person the income can be ascertained from his own declaration made before the Income Tax Authority.” It noted that “when returns are filed before the Income Tax Authority necessary particulars of business accounts and copies of Bank Statements are furnished and upon considering the necessary particulars along with declaration the authority decides whether to accept the said return or to seek more particulars.”
The judgment further stated that “once Income Tax Return is accepted by the Income Tax Authority it becomes authentic document with regard to the income of the victim.” It observed that “this is not a case where the Income Tax Return is filed after instituting the claim case thus there is no question of inflating the income.” The Court recorded that “when the income of a person is assessed by a competent authority it is not necessary for the Court adjudicating motor accident claims to ask for further particulars and sit in review of the assessment already made by such authority when such return is filed during life time of victim and not after instituting the claims case.”
Quoting from the Coordinate Bench decision in Surendar Kaur Singh, the Court reproduced: “the income tax return being a statutory document is to be relied for determining the income of the deceased even though it is the only available documentary evidence in support of the income of the deceased.” It also noted the observation that “the standard of proof in claim cases is one of preponderance of probabilities and not of proving a case beyond reasonable doubt.”
Referring to the Supreme Court decision in Malarvizhi, the Court extracted: “the determination must proceed on the basis of the income tax return, where available. The income tax return is a statutory document on which reliance may be placed to determine the annual income of the deceased.”
On applying the accepted principles, the Court stated that “the judgment and award passed by the Learned Trial Judge by considering the income of the victim cannot be sustained and the same should be set aside.” It recorded the computation based on the income tax return: “annual income to be Rs. 3,18,470/- … 40% future prospect comes to Rs. 1,27,388/- … annual dependency loss comes to Rs. 2,22,929/- … multiplier of 17 should be applied … total dependency loss comes to Rs. 37,89,793/-.” The Court also recorded that “Rs. 39 lacs is just and reasonable compensation.”
The Court directed that “this appeal is allowed in part.” It ordered that “the judgment and award dated 19.05.2022 passed by Learned Additional District Judge, Fast Track, 3rd Court, Sadar Paschim Medinipur is modified to the extent that the appellants are entitled to Rs. 39,00,000/- compensation from Respondent no. 1 ICICCI LOMBARD GENERAL INSURANCE CO LTD.” The Court further directed that the insurer “shall deposit before the Registrar General, High Court, Calcutta Rs. 39 lacs along with interest @ 6% per annum from the date of filing the claim case till today.”
It also stated that “in the event amount awarded by the Learned Trial Court is already paid balance amount shall be deposited.” The Court directed that “such deposit shall be made within 8 weeks from date.” It clarified that “the deposit may be withdrawn by the claimant/appellants upon compliance of all necessary formalities.” Finally, it ordered that “urgent photostat certified copy of this order, if applied for, should be made available to the parties upon compliance with the requisite formalities.”
Advocates Representing the Parties
For the Appellants/Claimants: Mr. Ashique Mondal, Adv.; Mr. Shahmeraz Alam, Adv.
For the Respondent: Mr. Saswata Bhattacharyya, Adv.
Case Title: Sandhya Rani Jana and Another v. ICICI Lombard General Insurance Co. Ltd. and Another
Case Number: F.M.A. 70 of 2023
Bench: Justice Biswaroop Chowdhury
