Structural phase transition from rhombohedral (space group: R3c) to orthorhombic (space group: Pnma) cell is observed in Bi1-xSmxFeO3 (x = 0 – 0.3) compounds. The evolution of non-ferroelectric Pnma phase reduces the dielectric strength and stabilizes the collinear antiferromagnetism. Temperature variations of dielectric permittivity and its loss component show the presence of Polomska transition and it is found to shift downward towards room temperature with increase in Sm concentration. The frequency dispersion of complex dielectric permittivity was best explained in terms of Havriliak-Negami equation and by invoking the conductivity contribution. The Cole-Cole plots of complex dielectric permittivity show two distinct semicircular arcs corresponding to dielectric relaxation due to grains and grain boundaries respectively. The relaxation dynamics is explained in terms of polaron hopping across Fe2+ and Fe3+ sites in grains and short range movement of oxygen vacancies at grain boundaries. The composition dependence of magnetization is explained in terms of evolution of weak ferromagnetism due to partial breaking of spiral spin structure and the growth of collinear antiferromagnetism driven by Pnma phase. We have also observed the exchange bias behavior in some of Sm substituted samples due to the exchange interaction at the interface of coexisting weak ferromagnetic (R3c) and collinear antiferromagnetic (Pnma) phases.