Income Assessment Of Deceased Can Be Made As Per Income Tax Return; Can’t Reject It Merely Because Its Submission Was After The Date Of Motor Accident: Supreme Court
The appeal before the Apex Court was filed against the judgment of the Delhi High Court reducing the motor accident compensation payable to the claimants.
Justice Sudhanshu Dhulia, Justice Ahsanuddin Amanullah, Supreme Court
While restoring an award of the Tribunal in a motor accident case, the Supreme Court has held that it is not legally sustainable to reject the Return on the sole ground of its submission after the date of the accident.
The appeal before the Apex Court was filed against the Final Judgment rendered by a Single Judge of the Delhi High Court. The High Court had reduced the compensation payable to the Appellants from Rs.31,41,000 to Rs.16,97,370, maintaining the interest awarded at the rate of 9% per annum.
The Division Bench of Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah held, “To reject the Return on the sole ground of its submission after the date of accident alone, in our considered view, cannot be legally sustained.”
Referring to the judgment in Malarvizhi v United India Insurance Co. Ltd., (2020), it further added, “Income Tax Return is a legally admissible document on which the income assessment of the deceased could be made.”
Factual Background
The incident dates back to the year 2008 when a Blue Line bus being driven in an allegedly negligent manner, hit a motorcycle which was being driven by Kapil Bhargava (deceased) along with his wife (first Appellant). Resultantly, the deceased died in the hospital, and the first Appellant survived but suffered grievous injuries.
The Appellant and other legal heirs of the deceased filed a Claim Petition under Section 166 read with Section 140 of the Motor Vehicles Act, 1988, before the Court of the Judge, MACT-1 (Central), Delhi (Tribunal), claiming compensation for the death of the deceased for Rs 40 lakh. The Tribunal awarded a compensation of Rs 31,41,000 with interest at the rate of 9% per annum.
When appeals were filed before the High Court seeking enhancement of compensation, the High Court held that the Income Tax Returns for the Assessment Year 2008-2009 were filed after the date of the accident, therefore, the income of the deceased had to be assessed on the basis of Assessment Year 2007-2008. Thus, the order reducing the compensation came to be passed. Aggrieved thereby, the appellants approached the Apex Court.
Reasoning
The Bench made it clear that just because on the date of the accident i.e., August 12, 2008, the Return for the Assessment Year 2008-2009 had not been filed, couldn’t be a disadvantage for the appellants, for the reason that the period for which the Return was to be submitted covered the period starting April 1, 2007 and ending March 31, 2008. “Thus, for obvious reasons, the Return would be only for the period 01.04.2007 to 31.03.2008, and date of submission would be post-31.03.2008. No income earned beyond 31.03.2008 would reflect in the Income Tax Return for the Assessment Year 2008-2009”, it said.
The Bench clarified that when faced with Returns for different Assessment Years, it would be up to the Tribunal concerned to adopt either the average income therefrom or choose an Assessment Year to rely upon.
“It is quite unfortunate that the High Court in the present case has dealt with the matter in such a casual and superficial way where the rightful claim of the appellants under a welfare legislation has been drastically reduced”, the Bench said while restoring the award of the Tribunal granting Rs 31,41,000 as compensation.
Cause Title: Nidhi Bhargava & Ors. v. National Insurance Company Ltd. & Ors. (Neutral Citation: 2025 INSC 526)
Appearance:
Appellant: AOR Kaushik Choudhury, Advocates Parminder Singh Goindi, Sandhya, Deepanshu Jain
Respondent: Advocate Abhishek Gola, AOR Viresh B. Saharya