Bengaluru: Once Income Tax Returns ( ITRs) in respect of the income of the individual is filed, these have to be examined for the purposes of calculating income and the same cannot be ignored.The Karnataka High Court has made this observation while granting an enhanced total compensation of Rs 40.54 lakh along with 9% interest to the family members of Shakila B Shetty, who died in a road accident in 2017.The accident took place on July 1,2017 .At around 2.30 pm, when Shakila was riding pillion on motorcycle ridden by her brother when it was hit by a BMTC bus in Rajajinagar area .Although she was shifted to a private Hospital, she succumbed to the injuries .Her husband Bhaskar Shetty along with their two children, approached the tribunal at Bengaluru, seeking for appropriate compensation.According to them, Shakila was running a tutorial and was earning Rs 1 lakh per month.They also submitted the ITRs pertaining to 2012-13 to 2016-17 as proof of income .However,the tribunal awarded only Rs 13.3 lakh compensation along with 9% interest,by taking the notional income of the deceased to be Rs 9,000 per month.The tribunal was of the view that no PAN card was produced to show that the deceased was an income tax assessee and that the ITRs placed before the court cannot be believed as there is variations in the signatures.Further, the tribunal pointed out that no document was produced that the deceased had done TCH course to be eligible to a teacher and no other documents produced to show that she was running a tutorial.Aggrieved by this order,the family members moved the High Court, reiterating the contentions put forth before the tribunal.They argued that the ITRs placed by them were completely ignored by the tribunal. They further added that no licence was required for running a tutorial.On the other hand, the BMTC defended the award passed by the tribunal.After perusing the materials on record,a division bench comprising Justices Jayant Banerji and Tara Vitasta Ganju noted that once the ITR in respect of the income of an individual are filed, these are to be examined for the purposes of calculating compensation.It is a settled law that the ITRs cannot be ignored or disregarded by the tribunal. The Supreme Court in Malarvizhi vs United India Insurance Company Limited case has held that ITRs filed by the appellants/claimants to prove the income of the deceased cannot be disregarded and it is a statutory document on which reliance shall be placed.The Supreme court has also held that where the ITRs has been filed, the latest among those ITRs requires to be taken into consideration where an employee is salaried. However, where the individual is self-employed or carrying on his own business, the average income of the previous three years’ ITRs shall be taken into consideration. If only 1 or 2 years’ returns have been filed, the fluctuation of income must be seen along with the surrounding circumstances of the business,the division bench added.The gross taxable income for the last three assessment years 2014-15, 2015-16 and 2016-17 of Shakila,was shown to be Rs.3.13 lakh, Rs.3.5 lakh and Rs.3.36 lakh respectively Thus, the average gross annual income of the deceased as per the ITRs filed for the past three years is Rs.3.33 lakh per annum and Rs.27,780 per month,the division bench further noted while modifying the compensation amount and also recalculation of the interest on the same.
