Income Tax Returns Filed After Death Still Valid for Motor Accident Claims: Supreme Court

The Supreme Court has held that income tax returns filed after an accident or even after the death of a victim cannot be rejected merely because they were submitted later, reiterating that such returns may be considered for assessing income in motor accident compensation claims.

In the case of a 32-year-old Ajmer resident who died in a 2006 road accident, the bench of Justices Sanjay Karol and N Kotiswar Singh applied this principle but declined to rely on his posthumously filed 2005–06 return after noting doubts about its genuineness, and therefore reassessed his annual income at Rs. 1 lakh to ensure a fair and reasonable computation.

32-year-old Rajendra Singh Gena was travelling from Jaipur to Ajmer on June 27, 2006, when a negligently driven truck collided with his vehicle, killing him on the spot. An FIR under Sections 279, 337 and 304A of the IPC was registered at Gegal police station. His legal representatives later filed a claim seeking Rs. 68.94 lakh, stating that he earned through transport and agricultural work and had disclosed incomes of Rs. 84,000 in 2004–05 and Rs. 1,26,000 in 2005–06.

The Motor Accident Claims Tribunal, Ajmer, in June 2009 held the deceased’s annual income to be Rs. 84,000 and awarded Rs. 9.74 lakh with 7.5% interest, applying a one-third deduction and a multiplier of 17. The Tribunal refused to consider the 2005–06 income return after noting that it was filed after the deceased’s death and carried signature discrepancies.

In April 2025, the Rajasthan High Court enhanced the compensation to Rs. 16.01 lakh, granting amounts towards future prospects, consortium, loss of estate and other conventional heads. It applied a one-fourth deduction based on the number of dependents but upheld the income assessed by the Tribunal.

Before the Supreme Court, the claimants argued that the High Court erred in rejecting the higher income of Rs. 1,26,000 reflected in the disputed 2005–06 return and in not applying the mandated increase under conventional heads. It was also contended that interest ought to have been computed at 9 per cent rather than 5 per cent.

The Supreme Court referred to Nidhi Bhargava v. National Insurance Co. Ltd. to reiterate that returns filed after an accident or death can be considered if they relate to a financial year preceding the incident. It accepted that the lower courts had reasonable grounds to doubt the authenticity of the deceased’s 2005–06 return but observed that business income cannot be assumed to remain stagnant and must be assessed with a forward-looking approach under the Motor Vehicles Act.

Taking this into account, court reassessed the deceased’s annual income at Rs. 1,00,000. Applying a 40% increase towards future prospects for a 32-year-old, a one-fourth deduction for personal expenses and a multiplier of 16, it computed the loss of dependency at Rs. 16.80 lakh. It further granted Rs. 18,150 each towards loss of estate and funeral expenses and Rs. 1,93,600 towards loss of consortium to four dependents, taking the total compensation to Rs. 19,09,900.

Court maintained joint and several liability of the driver, owner and insurer and directed that interest shall be paid as awarded by the Tribunal. It ordered that the enhanced amount be directly remitted into the claimants’ bank account within four weeks of the submission of account detailsal.

Case Title: Sayar & Ors Vs Ramkaran & Ors

Judgment Date: November 7, 2025

Bench: Justices Sanjay Karol and N Kotiswar Singh