COMMISSIONER OF INCOME-TAX, CALCUTTA vs BIJU PATNAIK

The Supreme Court held that the High Court erred in not directing a reference under Section 256(2) of the Income Tax Act, 1961, regarding the perverse decision of the Tribunal which ignored material facts. The Court established that the jurisdiction of the High Court includes ensuring that the Tribunal's findings are based on relevant evidence and not arbitrary conclusions. Consequently, the Court directed the High Court to refer the matter for further consideration, emphasizing the importance of proper assessment procedures in tax matters.