Income Tax Return Is Authentic Evidence for Determining Income in Motor Accident Claims: Calcutta High Court - 2025-12-09

Reliability of Income Tax Returns in Motor Accident Compensation: A High Court Perspective

In a significant ruling, the High Court at Calcutta has underscored the sanctity of statutory documents when calculating compensation for motor accident victims. Justice Biswaroop Chowdhury, while presiding over an appeal in Sandhya Rani Jana and Anr vs. ICICI Lombard General Insurance Co. Ltd. , emphasized that when a victim’s income is assessed by a competent authority, courts should rely on the Income Tax Return (ITR) rather than demanding supplementary evidence like bank passbooks.

The Backdrop: A Dispute Over Valuation

The appellants, the parents of a deceased goldsmith who lost his life in a 2014 motor accident, challenged an award granted by the Additional District Judge, Fast Track, 3rd Court, Paschim Medinipur. While the trial court awarded compensation, the appellants argued that the court erred by arbitrarily fixing the monthly income at Rs. 10,000, effectively discounting the victim's filed ITR, which declared an annual income of Rs. 3,18,470 for the assessment year 2014-2015.

The Insurance Company had contested the claim, arguing that the trial court was justified in demanding bank passbooks to corroborate the self-employed victim's stated income.

Legal Reasoning: Precedence and Documentation

Justice Chowdhury’s judgment clarifies that the "standard of proof in claim cases is one of preponderance of probabilities." Addressing the reliance on ITRs, the court noted:

> "When Income Tax Return is accepted by the Income Tax Authority it becomes authentic document with regard to the income of the victim... There is no ground to disbelieve the Income Tax Return."

The High Court drew substantial support from previous judicial precedents. In Surendar Kaur Singh vs. United India Insurance Company Limited and Malarvizhi vs. United India Insurance , the courts established that ITRs—being statutory documents filed during the victim's lifetime—should not be treated as "inflated" figures, especially when their accuracy has been verified by the tax department. The High Court firmly rejected the notion that a trial court should "sit in review" of assessments already conducted by competent tax authorities.

Key Observations

The Court highlighted the following principles in its decision:

• Authenticity of Statutory Documents: "Once Income Tax Return is accepted by the Income Tax Authority it becomes authentic document with regard to the income of the victim."
• Standard of Proof: "I find substance in the submissions... that the standard of proof in claim cases is one of preponderance of probabilities and not of proving a case beyond reasonable doubt."
• Presumption of Validity: "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."

Decision and Impact

Finding the initial assessment flawed, the Court re-calculated the compensation. By using the ITR income of Rs. 3,18,470 as the base, adding 40% for future prospects, and applying appropriate multipliers, the total compensation was increased to Rs. 39 Lakhs.

This ruling acts as a strong reminder for insurance tribunals to avoid over-complicating compensation claims. By affirming that valid ITRs during the lifetime of a victim are a reliable metric for income, the judgment streamlines the adjudication process, ensuring that the families of victims receive just compensation without being burdened by redundant documentation requirements. The court has directed ICICI Lombard to settle the enhanced compensation with interest within eight weeks.