ORDER Dipak Misra, J. 1. Regard being had to the similarity of the controversy involved in this batch of writ petitions, they were heard analogously and are disposed of by a singular order. For the sake of clarity and convenience, the facts in Writ Petn. No. 3222 of 2008 are exposited herein. 2. The petitioner, All India Punjab National Bank Officers' Association, is grieved by the deduction of tax at source by the authorities of the bank, the respondent Nos. 1 to 3 in respect of interest-free loan given to the members of the officers' association. The respondent Nos. 1 to 3 have issued a circular for taxing the said loans as the rate of interest being charged from the members of the association is less than the lending rate of the SBI. It is contended that Rule 3 of the IT Rules, 1962 (for short 'the 1962 Rules') has been amended by Notification No. 271 of 2007, dt. 7th Nov., 2007 and is made applicable for the asst. yr. 2008-09 that is, the financial year 1st April, 2007 to 31st March, 2008. It is urged that vide circular dt. 24th Jan., 2008, the respondent Nos. 1 to 3 have included loan available at concessional rate of interest under the head 'Salaries' by treating such loan as a perquisite in case it is less than the SBI lending rate. 3. It is contended that the petitioner association and its employees had approached this Court challenging the constitutional validity of Rule 3 and this Court in Writ Petn. No. 1572 of 2002 reported at All India State Bank of Indore Officers' Co-ordination Committee and Ors. v. CBDT and Ors. (2004) 186 CTR (MP) 649 dealt with the facet whether the rule runs contrary to the provisions contained in Section 17(2) of the IT Act, 1961 and whether it is discriminatory, arbitrary and violative of Article 14 of the Constitution. This Court after referring to the decision rendered in Arun Kumar and Ors. v. Union of India and Ors. (2006) 205 CTR (SC) 193 : (2006) 286 ITR 89 (SC) decided the matter directing that the authorities shall decide the claims of the members of the association relating to perquisites in the light of the judgment in Arun Kumar and Ors. (supra). v. Union of India and Ors. (2006) 205 CTR (SC) 193 : (2006) 286 ITR 89 (SC) decided the matter directing that the authorities shall decide the claims of the members of the association relating to perquisites in the light of the judgment in Arun Kumar and Ors. (supra). It is urged that the association has submitted a representation to the respondent-bank that the tax can be deducted at source only when there is a concession but the authorities of the bank have not adverted to the said representation. 4. It is urged that the determination of perquisite in the matter of concessional loan by comparing it to SBI PLR rate is arbitrary since the respondent-bank has to determine its own cost of funds and only thereafter can proceed to deduct tax in case their lending rate is less than the costs incurred by them. It is put forth that the petitioners are challenging the deduction of tax at source on the valuation of loans at concessional interest. It is put forth that the valuation of perquisite in the form, of loan at concessional rate or interest-free loan with reference to SBI lending rates is contrary to the decision rendered in Arun Kumar and Ors. (supra) wherein it has been held that before Section 17(2)(ii) can be invoked or pressed into service and before the calculation of concession as per Rule 3 is made, the authority exercising power must come to a positive conclusion that it is a concession. The determination of concession can only be made with reference to the cost to the employer and not with reference to any other third party's rate of interest because third party's rate of interest would also include the profit element of that party. In this background, a prayer has been made to declare the . FD/HO/A&T/CIR No. 3 of 2008 dt. 24th Jan., 2008 as contrary to the decision of the apex Court insofar as the valuation of perquisites in respect of loan at concessional rate of interest is being made with reference to the SBI lending rates while the same should be made with reference to the cost to the employer which is unsustainable. 5. A return has been filed by respondent Nos. 5. A return has been filed by respondent Nos. 1 and 2 contending, inter alia, that the contention raised by the petitioner that interest-free loan or loan at concessional fate of interest provided by the employer satisfies the ingredients of a perquisite by virtue of Section 17(2)(vi) and the method of valuation of the perquisite has been laid down in Rule 3(7)(i) and hence, the petitioner's reliance on the decision of Arun Kumar and others (supra) is misplaced. It is contended that the said decision was only in relation to concession in the matter of rent in respect of any residential accomodation provided by an employer to its employees. In the said decision, the constitutional validity of Rule 3 was upheld. As there was no deeming provision in Section 17(2)(ii) in the matter of concession in rent, the apex Court held that it is open to the assessee to contend that there is no 'concession' in the matter of accommodation provided by the employer to the employees, but the present case with regard to interest stands on a different footing. It is urged that Section 17(2)(vi) states that the value of any other fringe benefit or amenity as may be prescribed received by an employee from the employer shall be treated as a perquisite and be liable to tax. Thus, the power to prescribe such fringe benefit or amenity has been delegated to the rule-making authorities, that is, the CBDT. The manner of computation of such amenities is also to be prescribed by the CBDT. Thus, it is urged that Rule 3 specifies the amenities to be taxed and also lays down the method of computation of the benefit and hence, there is no justification in the stand that such fixation of rate of interest of loan would not make the grant of loan a concession. The stand put forth in the petition, that it cannot be treated as a concessional loan being the standard lending rate as the benchmark is erroneous, is totally misconceived. The SBI lending rate has been prescribed as the benchmark rate by Rule 3 itself. It is set forth that the difference between the interest charged by the SBI and the interest actually paid by the employee to its employer shall be the perquisite liable to be taxed and it is this standard which meets the concept of concession. The SBI lending rate has been prescribed as the benchmark rate by Rule 3 itself. It is set forth that the difference between the interest charged by the SBI and the interest actually paid by the employee to its employer shall be the perquisite liable to be taxed and it is this standard which meets the concept of concession. An employer charging less than the SBI rate would be recognised as extending a concession to its employees and there is nothing unconstitutional about this method. An interest-free loan or loan at concessional rate of interest given by an employer to its employees reduces the financial liabilities and, hence, is perquisite. It is assorted that Rule 3 prescribes the benefit and also specifies the method of valuation of the benefit, therefore, the law laid down in Arun Kumar and Ors. (supra) which pertains to rent-free accommodation treating the said provision as machinery provision is not applicable to the case at hand. 6. We have heard Mr. Sumit Nema with Mr. Mukesh Agrawal, Mr. Sudhir Kumar Sharma, Mr. Atul Choudhary, Mr. Narmada Prasad Choudhary and Mr. S.K. Pathak, learned Counsel for the petitioners, and Mr. Rohit Arya, learned senior counsel with Mr. Sanjay Lal, Mr. S.K. Rao learned senior counsel with Mr. V.K. Pandey, Mr. Praveen Chaturvedi, Mr. J.P.S. Oberai, Mr. H.C. Kohli, Mr. Anoop Nair, Ms. Snehlata Dixit and Mr. Sanjeev Tuli, learned Counsel for the respondents. 7. The singular question that emerges for consideration is whether the loan granted by the employer at the rate of interest below the rate of interest on SBI loan be regarded as a concessional loan and thereby would be amenable to tax which would be deducted at source or it should be treated as machinery provision and be determined at the time of assessment. The learned Counsel for the petitioners has submitted that if the language of Sub-clause (i) of Clause (7) of Rule 3 is read in proper perspective, it would mean that the value of benefit to the assessee resulting from interest-free or concessional loan has to be determined as per the basis provided thereafter and hence, the significant term is "concessional loan". The existence of concession, contends the learned Counsel for the petitioner, becomes, a jurisdictional fact which has to necessarily exist before valuation thereof can be ascertained. The existence of concession, contends the learned Counsel for the petitioner, becomes, a jurisdictional fact which has to necessarily exist before valuation thereof can be ascertained. The adoption of SBI interest rate as the yardstick for determining the value and then treating it as a concession is contrary to the principles laid down in Arun Kumar (supra). It is urged that the factum of concessional loan or otherwise has, therefore, to be determined first before proceeding to apply the second part of the rule relating valuation of the concessional loan. In this backdrop, Mr. Sumit Nema, learned Counsel who has led the argument, submitted that the existence of concession is a jurisdictional fact which has to necessarily exist before any valuation thereof can be ascertained. It is canvassed by him that if the stand of the Revenue is accepted the difference between SBI rate and the rate at which loan is granted to an employee per se is a concession, then the term "concession" would lose its meaning because in that case, any loan without the word "concession" before it would become perquisite. It is proponed by him that the word "concession" has a distinct meaning and the method of valuation visa-vis SBI rate cannot determine the concession. It is also highlighted by him that the adoption of SBI interest rate as the yardstick for arriving at concession for determining the value first and then treating it as a perquisite it will be deemed concession without any deeming provision. The valuation is required to be done on determination of the jurisdictional fact of 'concession' with reference to the cost of funds of the employer and only when the cost is higher than the rate at which the loan is given, concession can be said to exist. 8. Mr. Rohit Arya, learned senior counsel appearing for the Revenue, submitted that what was applicable to the house rent is not applicable to the loan and the benchmark has been correctly provided. The learned Counsel for the Revenue has laid immense emphasis on the decisions rendered in National Federation of Insurance Field Workers of India and Anr. v. Union of India and Ors. (2004) 187 CTR (Uttaranchal) 180 : (2004) 265 ITR 84 (Uttaranchal), P.N. Tiwari and Ors. v. Union of India and Ors. (2003) 185 CTR (All) 1 : (2004) 265 ITR 224 (All), V.K. Prasad and Ors. v. Union of India and Ors. (2004) 187 CTR (Uttaranchal) 180 : (2004) 265 ITR 84 (Uttaranchal), P.N. Tiwari and Ors. v. Union of India and Ors. (2003) 185 CTR (All) 1 : (2004) 265 ITR 224 (All), V.K. Prasad and Ors. v. Union of India and Ors. (2004) 192 CTR (Ker) 1 : (2004) 271 ITR 178 (Ker) and BHEL Employees' Association v. Union of India and Ors. (2003) 180 CTR (Kar) 412 : (2003) 261 ITR 15 (Kar). 9. Before we proceed to dwell upon the issue whether the loan of the present nature can be treated as a perquisite and whether it can be regarded as a concession, it is apt to take note of the previous background of the provisions and the law relating to the same. It is worth noting that Section 17(2) of the Act was inserted by the Taxation Laws (Amendment) Act, 1984. Sub-clause (vi) of Clause 2 of Section 17 of the Act which came to be inserted by the Amendment Act, 1984 stipulates that where the employer had advanced any loan for the purpose of building a house or purchasing of site or a house and a site or for purchasing a motor car, either no interest is charged by the employer on the amount of such loan or interest is charged at a rate lower than the rate of interest which the Central Government having regard to the rate of interest charged from its employees on loans for such purposes granted to them specified in this behalf by notification in the Official Gazette, an amount calculated on certain basis which would be regarded as "perquisite" received by the employee and charged to tax accordingly. The said amendment was intended to take effect from 1st April, 1985. However, subsequently the Finance Act, 1985, omitted the aforesaid provisions with effect from the date of their insertion, i.e., 1st April, 1985. At this juncture, it is apposite to mention that after Clause (vi) was inserted in Section 17(2) of the Amendment Act, 1984, the IT Rules were amended by incorporating Rule 3A to give effect to Clause (vi). The said Rule 3A was also deleted after the omission of Clause (vi) of Section 17(2). 10. It would not be out of place to refer to certain decisions of various High Courts to indicate how there has been delineation with regard to interest subsidy. The said Rule 3A was also deleted after the omission of Clause (vi) of Section 17(2). 10. It would not be out of place to refer to certain decisions of various High Courts to indicate how there has been delineation with regard to interest subsidy. In P.V. Rajagopal and Ors. v. Union of India (1999) 151 CTR (AP) 442 : (1998) 233 ITR 678 (AP), the High Court of Andhra Pradesh has expressed the view that interest subsidy cannot be taxed under Section 17(2)(iii) or 17(2)(iv). In P. Krishna Murthy v. CIT (1995) 126 CTR (Kar) 434 : (1997) 224 ITR 183 (Kar), the High Court of Karnataka has expressed the opinion that the subsidy was not taxable in the hands of the employees in view of the deletion of Sub-clause (vi) of Section 17(2) of the IT Act by the Finance Act, 1985. The aforesaid two decisions were approved by the Supreme Court in V.M. Salgaocar & Bros. (P) Ltd. v. CIT (2000) 160 CTR (SC) 225 : (2000) 243 ITR 383 (SC). When the matter stood thus, Section 17(2) was amended by the Finance Act, 2001 w.e.f. 1st April, 2002. In the said section, Sub-clause (vi) was inserted which reads as under: (vi) the value of any other fringe benefit or amenity as may be prescribed. 11. Rule 3 came to be substituted w.e.f. 1st April, 2001, i.e., for the asst. yr. 2002-03. Clause (7) of amended Rule 3 lays the following postulate: (7) In terms of the provisions contained in Sub-clause (vi) of Sub-section (2) of Section 17, the following fringe benefits of amenities are hereby prescribed and the value thereof shall be determined in the manner provided hereunder: (i) The value of the benefit to the assessee resulting from the provision of interest-free or concessional loan made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the simple interest computed @ 10 per cent per annum in respect of loans for house and conveyance and @ 13 per cent p.a. for other loans. 12. Thereafter, the rule was again amended w.e.f. 1st April, 2004. Clause (i) of the aforesaid rule was amended and the new clause was incorporated. 12. Thereafter, the rule was again amended w.e.f. 1st April, 2004. Clause (i) of the aforesaid rule was amended and the new clause was incorporated. It is as follows: Rule 3(7)(i) The value of the benefit to the assessee resulting from the provision of interest-free or concessional loan for any purpose made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the interest computed at the rate charged per annum by the SBI, constituted under the State Bank of India Act, 1955 (23 of 1955), as on the 1st day of the relevant previous year in respect of loans for the same purpose advanced by it on the maximum outstanding monthly balance as reduced by the interest, if any, actually paid by him or any such member of his household. 13. At this juncture, we may reproduce the relevant portion of the circular. It reads as under: Valuation of perquisite in respect of interest-free loan or loan at concessional rate of interest. The value of the benefit to the employee resulting from the provision of interest-free or concessional loan for any purpose made available to the employee or any member of his household during relevant previous year by the bank or any person on bank's behalf shall be determined as the sum equal to the interest computed at the rate charged per annum by the SBI, as on the 1st day of the relevant previous year in respect of loans for the same purpose advanced by it on the maximum outstanding monthly balance as reduced by the interest, if any, actually paid by him or any such member of his household. SBI lending rates are as follows: _____________________________________________________________________ As on 1 -4-2006 As on 1 -4-2007 for the asst. yr. for the asst. yr. 2007-08 2008-09 _______________________________________________________________________ Housing loan Upto 5 years 8.50% 10.25% ________________________________________________________________________ Above 5 years but upto 10 years 8.75% 10.75% ________________________________________________________________________ Above 10 years but upto 15 years 9.00% 10.75% ________________________________________________________________________ Above 15 years but upto 20 years 9.25% 10.75% ________________________________________________________________________ Car loan, for new car Upto 3 years (Rs. 7.5 lakhs) 8.00% 11.5% ________________________________________________________________________ Upto 3 years (below Rs. 2007-08 2008-09 _______________________________________________________________________ Housing loan Upto 5 years 8.50% 10.25% ________________________________________________________________________ Above 5 years but upto 10 years 8.75% 10.75% ________________________________________________________________________ Above 10 years but upto 15 years 9.00% 10.75% ________________________________________________________________________ Above 15 years but upto 20 years 9.25% 10.75% ________________________________________________________________________ Car loan, for new car Upto 3 years (Rs. 7.5 lakhs) 8.00% 11.5% ________________________________________________________________________ Upto 3 years (below Rs. 7.5 lakhs) 8.50% * - 11.75% 8.75%* ________________________________________________________________________ Above 3 years but upto 7 years 8.75% * - 12.00% 9.25%* ________________________________________________________________________ Two-wheeler loan 11.00% 14.25% ________________________________________________________________________ Education loan Loan amount upto Rs. 4 lakhs 10.50% 11.50% _________________________________________________________________________ Loan amount above Rs. 4 lakhs 11.50% 13.25% _________________________________________________________________________ Personal loan 12.75% 15.25% _________________________________________________________________________ * Applicable in the case of metro/urban borrowings *Applicable in the case of rural/semi-urban borrowing. 14. On a scrutiny of the history of the amendments and the anatomy of the provisions it is evident that the legislature, by inserting Clause (vi) to Sub-section (2) of Section 17 w.e.f. 1st April, 2009, has prescribed fringe benefit or amenities which are treated to be perquisite. Rule 3(7) prescribes the fringe benefit and at the same time it states that the 'value thereof shall be determined in the manner provided hereunder'. After the said postulate Clause (i) to (ix) lay down the procedure. As is evident, Rule 3(7) prescribes the amenity/benefit by way of valuation yardstick. It has the status of benchmark. If the valuation results in a positive figure, i.e., SBI rate-rate at which the employer grants loan, then it would be treated as a concession. Thus, the rule lays down an express method and provides for a basis of ascertaining the value for concession. 15. It is worth noting that the rule-making power is inherent in Section 295 of the Act. The relevant portion of the same is as follows: (1) The Board may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters: (c) the determination of the value of any perquisite chargeable to tax under this Act in such manner and on such basis as appears to the Board to be proper and reasonable. 16. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters: (c) the determination of the value of any perquisite chargeable to tax under this Act in such manner and on such basis as appears to the Board to be proper and reasonable. 16. On a scrutiny of the aforesaid provision it is luminescent that while granting power to make rules, the legislature has also given the guidelines in which area the rule-making power can be exercised. It includes the determination of the value of any perquisite chargeable to tax under the Act. Thus, it is quite express that the manner and the basis of the method is left to the rule making authority. It is apposite to note here that the method has been devised in Rule 3 as regards the manner and basis for ascertaining the value of concessional loan. Clause (7) of Rule 3 has to be read in conjunction with Clause (i) which follows it. That seems to us to be the intendment of the rule and when they are read conjointly, gets abundantly clear that the legislature has intended to value the concessional loan for the purpose of arriving at the value of the concession by making a simple calculation of the difference between the SBI rate and the rate paid by the employee. Rule 3 has been held valid in the decisions which have been referred to by Mr. Rohit Arya, learned senior counsel for the Revenue. Apart from those decisions, it has also been held valid in Tata Workers' Union and Ors. v. Union of India (2002) 176 CTR (Jhar) 325 : (2002) 123 Taxman 426 (Jhar), Aditya Cement Staff Club v. Union of India (2003) 182 CTR (Raj) 554 : (2003) 131 Taxman 609 (Raj) and All India State Bank of Indore Officers' Co-ordination Committee and Ors. v. CBDT (2004) 186 CTR (MP) 649 : (2004) 134 Taxman 303 (MP). 17. In this context, we may refer with profit to certain paras from the decisions rendered in Arun Kumar (supra). In para 18, their Lordships opined that the definition of the term "perquisite" covers various items mentioned in Section 17(2) and the definition is inclusive in nature and not exhaustive. 17. In this context, we may refer with profit to certain paras from the decisions rendered in Arun Kumar (supra). In para 18, their Lordships opined that the definition of the term "perquisite" covers various items mentioned in Section 17(2) and the definition is inclusive in nature and not exhaustive. In para 71, it has been held as follows: The word 'concession' has neither been defined in the Act nor in the rules. According to the Concise Oxford English Dictionary, 'concession' is 'a thing that is conceded', 'a gesture made in recognition of a demand or prevailing standard', 'a reduction in price for a certain category of person'. It is 'a grant ordinary applied to a grant of specific privileges by Government, a special privilege granted by a Government, corporation or other authority' (P.R. Aiyer, Advanced Law Lexicon, 2005; Vol. 1; p. 944). It is 'an act of yielding or conceding as to a demand or argument' something conceded; usually employing a demand; claim or request', 'thing yielded', 'a grant' Indian Aluminium Co. Ltd. v. Thane Municipal Corporation (1992) Suppl. SCC 480. 'Concession' is a form of 'privilege' V. Pechimuthu v. Gowrammal (2001) 7 SCC 617 . 18. In para 72, their Lordships addressed to the term "concession" and opined thus: 72. It is, therefore, clear that before Section 17(2)(ii) can be invoked or pressed into service and before calculation of concession as per Rule 3 is made, the authority exercising power must come to a positive conclusion that it is a concession. 'Concession', in our judgment is, thus a foundational or jurisdictional fact. 19. Eventually, in para. 73, the apex Court held thus: 73. A 'jurisdictional fact' is a fact which must exist before a Court, Tribunal or an authority assumes jurisdiction over a particular matter. A jurisdictional fact is one on the existence or non-existence of which depends the jurisdictional of a Court, a Tribunal or an authority. It is the fact upon which an administrative agency's power to act depends. If the jurisdictional fact does not exist, the Court, authority or officer cannot act. If a Court or authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by erroneously assuming the existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess. 20. If a Court or authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by erroneously assuming the existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess. 20. Thereafter, their Lordships, proceeded to state what is jurisdictional fact and expressed the opinion as under: In Halsbwy's Laws of England, it has been stated: 'Where the jurisdiction of a Tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of the issue. If, at the inception of an inquiry by an inferior Tribunal, a challege is made to its jurisdiction, the Tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not conclusive'. 21. Eventually, their Lordships, while upholding the constitutional validity of Rule 3 of the Rules, held thus: In view of our order passed in Civil Appeal No. 3270 of 2003, transferred Case Nos. 101 and 102 of 2006 stand disposed of. 22. From the aforesaid pronouncement of law, it is quite luculent that in Arun Kumar (supra), the apex Court while interpreting Section 17(2)(ii) which was a substantive provision containing the prescription of concession in the matter of rent, held that Rule 3 is in the nature of machinery-provision and applies only in the cases of concession. In the case at hand, under Section 17(2)(vi), power has been given to the CBDT to frame rules both for prescribing a perquisite and for its valuation. Thus, Rule 3 contains both the faces, namely, prescription of a perquisite and the valuation thereof. Quite apart from the above, there is a distinction between the extension of benefit of accommodation and the grant of loan. As is manifest, the statute has made a device as regards the manner and method of ascertaining the perquisite and, therefore, it cannot be faulted. The valuation method clearly provides for a yardstick. The submission of the learned Counsel for the petitioners to the effect that unless it values below the cost impact of the employer it cannot be treated as a concessional loan, does not commend acceptance. The valuation method clearly provides for a yardstick. The submission of the learned Counsel for the petitioners to the effect that unless it values below the cost impact of the employer it cannot be treated as a concessional loan, does not commend acceptance. We are disposed to think that when a standard has been made in respect of the bank employees qua the availability of the loan, the same is a concession and, accordingly, there is no warrant for interference. 23. In view of the aforesaid premise, we do not perceive any merit in these writ petitions and accordingly, they are dismissed. However, in the facts and circumstances of the case there shall be no order as to costs.