The prayers were reportedly offered by an imam on November 23 after the Friday namaz at the mosque at nearby Trikkakara. After the namaz, prayers were offered for departed souls and the priest had reportedly included the name of Kasab.
When the incident leaked out, police began a probe and questioned the mosque's authorities and those who had participated in the prayers.
The managing committee of the mosque removed the imam from the post after learning about the incident, committee sources said.
Investigation is on, police said.
Kasab was hanged in Yerawada jail in Pune on November 21.
