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In CIT v. Mahindra and Mahindra Ltd., [1983] 144 ITR 225, the apex court has held that application of mind is a must before such an action can be taken. The apex court further held (page 237) :

"By now, the parameters of the court's power of judicial review of administrative or executive action or decision and the grounds on which the court can interfere with the same are well settled and it would be redundant to recapitulate the whole catena of decisions of this court commencing from Barium Chemicals' case [1966] 36 Comp Cas 639 ; [1966] Suppl. SCR 311 ; on the point. Indisputably, it is a settled position that if the action or decision is perverse or is such that no reasonable body of persons, properly informed, could come to or has been arrived at by the authority misdirecting itself by adopting a wrong approach or has been influenced by irrelevant or extraneous matters the court would be justified in interfering with the same. This court in one of its later decisions in Smt. Shalini Soni v. Union of India [1981] 1 SCR 962, 966 ; AIR 1981 SC 431, 434, has observed thus : 'It is an unwritten rule of the law, constitutional and administrative, that whenever a decision making function is entrusted to the subjective satisfaction of a statutory functionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote'."