Posthumously filed Income Tax Returns are admissible for assessing annual income and awarding just compensation.

On April 2, 2017, Vasantkumar (the deceased), aged 25, died in a motor vehicle accident involving a Chevrolet car and a truck driven rashly and negligently

The claimants (parents and brother) sought compensation of Rs. 68,33,000/- citing the deceased's grocery business income

The Motor Accident Claims Tribunal (MACT), Palanpur, in MACP No. 99/2017, awarded Rs. 34,53,120/- at 9% interest

The Tribunal excluded the Income Tax Return (ITR) for the assessment year 2017-2018 because it was filed two months after the death

The claimants appealed for enhancement of the quantum

1. Whether the Income Tax Return filed posthumously can be considered as a valid benchmark for determining the deceased's income for compensation

2. Whether the claimants are entitled to enhanced compensation under the heads of loss of consortium, loss of estate, and funeral expenses

The court relied on the Supreme Court precedent in Sayar & Others v. Ramkaran & Others [SLP (C) No. 24501/2025], which establishes that ITRs filed after death can be considered if they show a consistent, non-inordinate growth trajectory.

It applied National Insurance Company Ltd. v. Pranay Sethi (2017) regarding the addition of 40% for future prospects for a self-employed person under 40 and standard rates for conventional heads.

It further applied Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram (2018) to grant parental consortium to the surviving parents.

The High Court observed that the deceased's ITRs for three consecutive years showed a consistent rise (Rs. 2.63 lakh to Rs. 3.10 lakh), indicating business growth rather than an artificial posthumous spike.

Following Sayar, the court held that the Tribunal erred in ignoring the 2017-2018 ITR merely because it was filed posthumously.

Consequently, the annual income was reassessed at Rs. 3,10,536/-. Applying the standard formula—adding 40% for future prospects and deducting 50% for personal expenses (as the deceased was a bachelor)—the court recalculated the loss of dependency using a multiplier of 18.

The court also corrected the Tribunal’s omission of consortium and the meager awards for funeral expenses and loss of estate to bring them in line with current legal standards.

It enhanced the total compensation from Rs. 34,53,120/- to Rs. 40,45,940/-, granting an additional sum of Rs. 5,92,820/- with 9% interest. Specifically, it awarded Rs. 39,12,840/- for loss of dependency, Rs. 96,800/- for consortium, and Rs. 18,150/- each for loss of estate and funeral expenses.

The Insurance Company (Respondent No. 2) was directed to deposit the additional amount within six weeks.