Karnataka HC Raises Injured Auditor’s Award To Rs 10.25 Lakh, Using ITR Filed After Crash For 2016-17 Income

On 3 March 2017, the appellant was injured when a septic tanker struck his motorcycle.

He was hospitalized from 3 to 13 March 2017 and underwent surgery.

He claimed that he worked as an auditor and earned income from both salaried and private auditing work.

The MACT found the tanker driver negligent and awarded ₹3,55,539 with 8% annual interest, assessing whole-body disability at 17% but functional disability at 10%; it used notional monthly income of ₹9,000 because it considered the ITR filed for assessment year 2017–18 insufficient to prove income

The injured claimant appealed, seeking enhanced compensation, principally on the basis of his ITR and the award for loss of amenities

Under Sections 166 and 173(1) of the Motor Vehicles Act, 1988, a claimant may seek compensation for injuries and appeal an award.

In assessing loss of future earning capacity, Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, requires the Tribunal to distinguish medical disability from economic loss and assess the effect of the disability on the claimant’s earning capacity by reference to the evidence, occupation and other relevant circumstances.

Malarvizhi v. United India Insurance Co. Ltd., (2020) 4 SCC 228, and Anjali v. Lokendra Rathod, 2022 SCC OnLine SC 1683, establish that an available ITR is a statutory document that should be considered in determining income.

Rashmirekha Tripathy v. The Branch Manager (Legal Claims), Sriram General Insurance Co. Ltd., 2026 SCC OnLine 1256, distinguishes salaried and self-employed income: the preceding year’s ITR may establish salaried income, while business income generally calls for consideration of up to three years’ ITRs and relevant surrounding circumstances.

The Court held that the Tribunal erred in rejecting the ITR merely because it was filed after the accident and because earlier returns were not produced.

The assessment-year 2017–18 return related to financial year 2016–17 and recorded gross total income of ₹4,10,724, which the Court treated as monthly income of ₹34,227.

Applying Raj Kumar, the Court retained the Tribunal’s 10% functional-disability assessment rather than equating the doctor’s 17% whole-body medical disability with loss of earning capacity.

It recalculated future income loss as ₹34,227 × 10% × 12 × 17 = ₹6,98,231, and enhanced other heads—including pain and suffering, attendant and travel expenses, laid-up-period income and loss of amenities—while retaining the medical-expense and future-medical-expense awards.

The Court modified the award and enhanced total compensation from ₹3,55,539 to ₹10,25,624, with interest at 8% per annum from the date of the petition until realization.

The insurer was directed to deposit the enhanced compensation and applicable interest within eight weeks; the remaining part of the Tribunal’s award was left undisturbed.