The media watchdog said his press visa application was immediately passed to the New Delhi, which was still to respond.
But Indian diplomats accused him of 'hostile' coverage, adding that his reporting from Mumbai was 'illegal', it said.
An Indian official, contacted by IANS, said as per his information the journalist had come on a tourist visa to Mumbai last year and had stayed on to report from there, an action that construed 'serious violation' of visa rules in force internationally.
The official, who could not be identified as per official rules, said Der Spiegel had also, in a letter to the Ministry of External Affairs, admitted wrongdoing by its journalist who had come to India on a short-term tourist visa but then began reporting for his publication.
Spiegel Online editor Mathias Muller von Blumencron, who met with the Indian ambassador to Berlin, was quoted as saying: 'The irony is that Hasnain Kazim's family had to fight to be accepted in Germany and now he is being rejected by his country of origin.
'We find this very sad. He is one of our most brilliant online reporters and we still do not understand why the Indian government is refusing to give him a visa.'
The statement alleged that the personal belongings of Kazim and his family were searched by Indian customs and retained for three months before being sent back to Germany.