Information and Broadcasting Minister M Venkaiah Naidu said the channel, run by Naik's Islamic Research Foundation, was denied the rights for "not fulfilling due conditions".
"One allegation was leveled that Peace TV was denied permission for being Islamic. No such discrimination existed in India in the past, will never be there in future. These are wrong allegations," he told reporters here, maintaining that Naik levelled the charge for his own promotion.
When the owners applied again for permission in 2009, MHA sought details such as directors and funding of the channel, he said.
"They did not submit the details. So, there was no question of giving it permission. There is no question of banning a channel which doesn't have permission," he said.
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On the Information and Broadcasting Ministry's role in the matter, Naidu said it had only written to states, alerting them on taking action against those who downloaded the channel in an unauthorised manner and transmitted it "as it was against law".
According to the minister, the owners had filed application as Supreme Multi Network Private Ltd to download the TV channel in current affairs category. The channel was permitted to be up-linked from Dubai at that time, he added.
Speaking to the media via Skype earlier in the day, Naik had alleged that his channel was denied permission for being "Islamic".