The Punjab and Haryana High Court has upheld a Motor Accident Claims Tribunal award that assessed the income of a 36-year-old High Court advocate on the basis of his latest income tax return alone.

The insurer had argued that the Tribunal should have taken the average of his last three returns.

Justice Harsh Bunger held that the Supreme Court's recent decision in Rashmirekha Tripathy v. Branch Manager (Legal Claims), Shriram General Insurance Co. permits reliance on one or two ITRs for a self-employed person, provided the surrounding circumstances are considered.

Explaining why a lawyer's income tends to grow over the years, the Court observed,

“…undoubtedly, at the beginning of practice, a lawyer has to struggle to establish his reputation and to increase his practice. The professional life of a lawyer, unlike cases of Government servants, is a life of hardship and of struggle. The fruit of his labour come to him during the course of time. His practice also depends on various factors which may be beyond his control. It is undisputable that experience at Bar is an asset to a practising Advocate and enlarges scope of practice.”

The Court also took judicial notice of the growth in litigation and the rising paying capacity of clients:

“One also cannot forget the fact that litigation has been on the increase for the last three decades; one cannot overlook the fact that the economic prosperity has ushered in. The economic prosperity and the increase in litigation have certainly contributed to the economic upliftment of the lawyers as a professional community.”

Munish Kumar Gulati, an advocate practising in the Punjab and Haryana High Court, died on March 8, 2024. His car was hit from behind by another car near Mullana, District Ambala, and crashed into a tree.

The Tribunal at Kurukshetra found that the other car had been driven rashly and negligently. It awarded his widow and the other claimant Rs. 44,63,095, with interest at 6% per annum, calculated as follows:

Annual income: Rs. 4,16,990, based on his ITR for assessment year 2022-23.

Future prospects: 40%, since he was about 36 years old.

Personal expenses: a deduction of 50%.

Multiplier: 15.

Conventional heads: amounts for loss of estate, funeral expenses and loss of consortium.

The Tribunal held the insurer, National Insurance Company, liable to pay.

The insurer challenged the award on a single ground: that the Tribunal had erred in relying only on the 2022-23 return instead of averaging the last three returns.

The Court referred to the Supreme Court's decision in Rashmirekha Tripathy, decided on July 1, 2026. That judgment distinguishes salaried persons, for whom the previous year's ITR is sufficient, from self-employed persons. For self-employed persons, the average of up to three previous ITRs is “to be taken as a reference point”, but surrounding circumstances must also be considered.

Considering the above case, the Court held, “…there is no bar in considering one or two Income Tax Returns (ITRs) in respect of the deceased, however, the same would have to be done by considering the surrounding circumstances as well…”

Tribunal's Assessment Upheld

The Tribunal had relied on the 2022-23 return for the reasons that the returns had been proved by an official of the Income Tax Department, and his cross-examination did not dent their authenticity.

Each return had been filed in the same year it related to, and not retrospectively to create evidence of income and no evidence had been led to show that the deceased's income had decreased, it said.

The Court noted that the deceased was a practising advocate of the High Court and an income tax payee, aged about 36. It held:

“Thus, considering the fact that the deceased-Munish Kumar Gulati was a practising Advocate in this High Court and taking judicial notice of the fact that in the last three decades, the litigation has been on the increase coupled with the fact that with the increase in the paying capacity of the clients, the lawyers have also benefitted therefrom and even the income tax returns (ITRs) of last three years of deceased-Munish Kumar Gulati (prior to his death) reflects progressive trend; I see no reason which may warrant interference in the assessment of yearly income…”

In the light of the above, the insurer's appeal was dismissed.

Mr. Harjinder Singh, Advocate for the appellant.