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(1) Whether the imposition of income-tax in respect of income derived from a permanently settled estate would be a breach of Regulation XXV of 1802 relating to Permanent Settlement.

(2) Whether the income of Rs. 7,612 derived from the sale of wood etc. (as detailed herein above) is exempt under Section 4(3)(viii) read with Section 2(1) of the Indian Income-tax Act, 1922.

3. The words " as detailed herein above " mean of course as detailed in the order of reference.

4. In Chief Commissioner of Income-tax v. gamindar of Singampatti (1922) I.L.R. 45 Mad. 518 (F.B.) a Special Bench of three Judges of this Court held that income from a permanently settled estate was exempt from all taxation beyond the peishkush payable to Government. The precise question in that case was whether the income from forests and fisheries was agricultural income and therefore not chargeable to income-tax. The Court did not decide whether such income came within the definition of agricultural income, although it would appear that the learned Judges were inclined to the view that it was. They based their decision on the broad ground that the Madras Regulation and the sanad issued to the Zamindar precluded further taxation by the Government. The sanad followed the provisions of the Regulation. In the present case, the sanad has not been produced, but it may be taken that it was also in accordance with the Regulation.

5. If the decision in Chief Commissioner of Income-tax v. Zamindar of Singampatti (1922) I.L.R. 45 Mad. 518 (F.B.) stood alone we should be bound to answer the first question referred in favour of the assessee; but it does not stand alone. There is a judgment of the Privy Council of later date which has direct bearing. It was delivered in Prabhatchandra Barua v. King-Emperor (1930) 59 M.L.J. 814 : L.R. 57 I.A. 228. I.L.R. 58 Cal. 430 (P.C.) where the same question arose with reference to the Bengal Permanent Settlement Regulation (Bengal Regulation I of 1793). Their Lordships pointed out that while that Regulation contains assurances against any claim to an increase of the jama, based on an increase of the zamindari income, no promise is given in it that a zamindar shall in respect of the income which he derives from his zamindari be exempt from liability to any future general scheme of property taxation, or that the income of the zamindari shall not be subjected with other incomes to any future general taxation of incomes.

(ix) Ground-rent for permanent shops at hauls and bazars.

(x) Stall fees paid by temporary (daily) sellers at hauts and bazars.

11. The learned Counsel for the assessees has not been able to advance any reason why this Court should not apply the decision in Prabhatchandra Barua v. King-Emperor (1930) 59 M.L.J. 814 : L.R. 57 I.A. 228 : I.L.R. 58 Cal. 430 (P.C) to the Madras Regulation. If the Bengal Regulation permits of the profits and gains of a zamindari, other than those derived from agriculture, being assessed to income-tax, the same considerations must apply to the Madras Regulation. We hold that their Lordships' judgment impliedly overrules the judgment of this Court in Chief Commissioner of Income-tax v. Zamindar of Singampatti (1922) I.L.R. 45 Mad. 518 (F.B.) and accordingly we answer the first question by saying that the imposition of income-tax in respect of income other than agricultural income derived from a permanently settled estate would not be a breach of the Madras Regulation.

12. We have now to decide whether the income derived from forests of spontaneous growth and from trees which have grown wild in non-forest areas represents agricultural income within the meaning of the definition given in Section 2(1) of the Income-tax Act. As we have indicated, the learned Judges who decided Chief Commissioner of Income-tax v. Jamindar of Singampatti (1922) I.L.R. 45 Mad. 518 (F.B.) were inclined to the view that income from forests and fisheries would be agricultural income, although they did not decide this question. It is very difficult to see how income from fisheries could be classified as agricultural income. In fact the decision of the Privy Council in Prabhatchandra Barua v. King-Emperor (1930) 59 M.L.J. 814 : L.R. 57 I.A. 228 : I.L.R. 58 Cal. 430 (P.C.) shows clearly that it cannot be so classified. Their Lordships did not, however, have to consider whether income from forests or individual trees of spontaneous growth comes within the definition and therefore it is necessary to examine the question for ourselves in the light of the reported cases which have bearing on it.