Question

why did the permanent system fail to generate desired revenue for the british

Answer 1

Moreover, the agricultural prices were very low and dependence on monsoon was very high.
The powers of zamindars were controlled by the company because it wanted them to live under its guidelines.The company feared that if agricultural prices rose in future then it wouldn't be able to claim the revenue on increased income of peasants.
The zamindars were never able to pay all the revenue demands.
The consequence was that a number of zamindars were auctioned.

Answer 2

The Permanent Settlement failed as the zamindars were collecting a large part of the money earned by peasants and only paid a part of it to the British as they had earlier fixed. This resulted in peasants suffering from poverty, them owing a lot of money and the zamindars flourishing greatly.