I have worked out to realise that a pin-hole phenomenon is similar to dilation of two images on the image plane.
* one image is that of the hole shape, with dimensions proportional to the actual size.
*Other image is that of the object from which light reaches the pin hole.(Ex: sun , in case of a mirror reflection)

What actually happens is , the modified image of the hole on image plane is nearly equal to that of the actual size of hole.(because , distance from hole to image plane is negligible with respect to distance from light source to pin hole)
  where as a similar fraction of the big size of light source(ex sun in our case),gives a size very  much smaller (negligible w.r.t sun ), yet bigger than that of the modified pin hole.
  Thus the dilation of these two images gives the image of sun.


To make this clear to those who don't know what dilation means:
  consider you have a big circle and a small rectangle(or any other shape).What you have to do is, trace the area covered by the circle making the center of circle pass through every point on the rectangle.So, if the rectangle is very small, it is as if the center of circle has not moved(nearly), thus the trace again gives a circle.

If the image plane is very near to the pin hole(mirror in our case), the shape of modified pin hole dominates the shape of the (circle)sun. i.e, you have a small circle and a big rectangle.Now if similar process as mentioned above is done, it looks as if the image of rectangle is not disturbed , except blurring at he edges.