Reasonable apprehension of bias required recusal where the same officer had earlier decided an identical issue against the assessee.

Reasonable apprehension of bias can disqualify an appellate authority even without proof of actual bias where a litigant could fairly doubt impartiality. Here, the same officer had earlier decided an identical issue adversely against the same assessee in a connected assessment year and had recused himself in that related appeal; fairness required the same recusal for the companion appeal because no distinguishing features were shown. Hearing the appeal in those circumstances would undermine the appellate remedy and violate natural justice. The objection to bias was therefore upheld, and the orders of the First Appellate Authority and the Tribunal were unsustainable.

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Issues: Whether the First Appellate Authority was disqualified by reasonable apprehension of bias from hearing the assessee's appeal arising from an earlier adverse order passed in a connected matter.

Analysis: The governing test is not whether actual bias is proved, but whether, in the relevant facts, a litigant could reasonably apprehend that the decision-maker would not act impartially. Where the same officer had earlier decided an identical issue adversely against the same assessee in a connected assessment year and had correctly recused himself from hearing the appeal for that year, the same principle of fairness required recusal from the companion appeal as well, absent any distinguishing features. Proceeding to hear the appeal in such circumstances would render the appellate remedy illusory and offend the principles of natural justice.

Conclusion: The objection based on bias was upheld, and the orders of the First Appellate Authority and the Tribunal were unsustainable.

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