Permanent settlement does not exempt estate income from general income-tax absent express statutory immunity.

Income derived from a permanently settled estate from sale of forest produce and spontaneous growth was held not to be exempt from income-tax merely because the Permanent Settlement Regulation fixed the land revenue permanently. Produce from trees growing naturally without human intervention was treated as outside agricultural income under the Indian Income-tax Act, 1922. The Regulation fixed the jama, but it did not confer any general immunity from subsequent income-tax on estate income. Income from the settled estate remained assessable under the Act, subject only to express statutory exemptions.

---

---

Issues: Whether income derived from a permanently settled estate from sale of forest produce and spontaneous growth is exempt from income-tax on the footing that the Permanent Settlement Regulation bars any further taxation beyond the fixed jama.

Analysis: The income in question was not pressed as agricultural income, in view of the governing authority that produce from trees growing naturally without human intervention is not agricultural income within the meaning of the Indian Income-tax Act, 1922. The remaining question was whether the Permanent Settlement Regulation conferred immunity from general income-tax on income derived from the zamindari. The Regulation fixed the land revenue permanently, but it did not contain any promise that income derived from the estate would be exempt from future general taxation of incomes. Income derived from a permanently settled estate is therefore assessable under the Indian Income-tax Act, subject only to the statutory exemptions provided in the Act.

Conclusion: The claimed exemption failed and the income was rightly subjected to tax.

Ratio Decidendi: A permanent settlement fixing land revenue does not exempt income derived from the settled estate from liability to a subsequent general income-tax unless such exemption is expressly provided by statute.

---