AITA senior executive committee member Hiranmoy Chatterjee said that Bhupathi was banned from playing for the country till June 2004 under the rules provided in the constitution of the governing body.
"We took the decision after a meeting of the players disciplinary committee. Under Rule 36 A(2) of the AITA constitution, a player stands suspended under disciplinary grounds if he declines to play for state/country without reason," Chatterjee said.
"We are firm on our stance. Let him take whatever action he wants to," he said.
"We have not used the word ban. We would not consider him for selection till June 2014. (Rohan) Bopanna too has to suffer as he too had declined to play," he added.
He, however, added that the doors of AITA would be open if they come forward and apologise.
Chatterjee accused Bhupathi of trying to play the role of player, selector and administrator at the same time.
"Bhupathi wants to be a player, selector and administrator at the same time. Let's take an example of Indian cricket team, tomorrow if Gautam Gambhir says he would not play for India if he is not allowed to open batting with Virender Sehwag. What will happen then?" Chatterjee asked.
Chatterjee also defended Leander Paes, whom he said has always given his best for the country.
"At one time Bhupathi is blaming AITA and at one time Leander. Leander has nothing to do with this. He has always given his best foot forward for the country."
Stung by the two-year ban imposed on him, Bhupathi had earlier in the day accused AITA of resorting to "divide-and-rule" policy and said its "dictatorial attitude" will be harmful for the future of Indian tennis.
Addressing a press conference in Mumbai, a hurt Bhupathi made a scathing attack on AITA and its president Anil Khanna who, he alleged, was playing "dirty politics" and creating rift among players, particularly between him and Paes.