The role of rare earth ion R3+ in spin reorientation and magneto dielectric response is investigated by substitution of non-magnetic smaller ionic radii Lu3+ in multiferroic hexagonal HoMnO3. The XRD analysis suggests that the dopant may preferably goes to C3V site up to 1/3rd of the composition in order to reduce the lattice distortion. We suggest that the R3+ ion at C3 site could play a strong role in spin reorientation than the C3V site. The observation of TSR even in LuMnO3 precludes the role of rare earth magnetic moment in driving the spin reorientation. Surprisingly, the magneto dielectric response of HoMnO3 is dominated by the rare earth RO8 dipoles. The oppositely oriented RO8 dipole at the C3V and C3 determines the magneto dielectric response in various magnetic phases reaffirming the site specific substitution. Thus, site specific doping could be a way to enhance the magnetoelectric coupling strength.