The correct answer is option 3.

Option 1 states that Permanent Settlement was introduced by Lord Cornwallis. This is correct. Lord Cornwallis, who was the Governor-General of British India, introduced the Permanent Settlement system in 1793.

Option 2 states that Permanent Settlement was implemented in Bengal and Bihar. This is correct. The system was initially implemented in these two regions as a pilot project.

Option 3 states that Zamindars were only revenue collectors but not the owners of the land. This is incorrect. Under the Permanent Settlement, the Zamindars were made the owners of the land. They were given the right to collect revenue from the peasants in exchange for providing a fixed amount of revenue to the British government.

Option 4 states that the cultivators were reduced to the status of tenants. This is incorrect. The cultivators, also known as peasants or ryots, continued to work on the land but now had to pay their revenue to the Zamindars instead of the government. They were not reduced to the status of tenants, but their relationship with the Zamindars changed.

In conclusion, option 3 is the incorrect statement as Zamindars were made the owners of the land under the Permanent Settlement system.