Where DIT-II was exercising supervisory functions over the Assessing Officer, the real likelihood of “official bias” cannot be ruled out. Even if the officer is impartial and there is no personal bias or malice, nonetheless, a right minded person would think that in the circumstances, there could be a likelihood of bias on his part. In that event, the officer should not sit and adjudicate upon the matter. He should recuse himself. This follows from the principle that justice must not only be done but seen to be done. In order to ensure that no person should think that there is a real likelihood of bias on the part of the officer concerned, the CBDT is directed to ensure that a jurisdictional Commissioner is not nominated as a member of the DRP under Rule 3(2) of the Rules. By doing this, the principle that justice must not only be done but seen to be done would be ensured - Hyundai Heavy Industries Ltd. Versus Union of India [2011 (7) TMI 577 (HC)]

 

Perceived official bias: jurisdictional commissioners must be excluded from dispute resolution panels to preserve fairness. A jurisdictional commissioner who supervises the Assessing Officer must be excluded from being a member of the Dispute Resolution Panel when their supervisory role creates a real likelihood of official bias, because even absent personal malice a reasonable person could perceive partiality; the principle that justice must not only be done but seen to be done requires such recusal and administrative rules must prevent nomination of the jurisdictional Commissioner to the DRP.