AITA CEO Akhouri Bishwadeep told PTI that they have decided to implement the sports ministry's direction.
The AITA official said that around mid-March, the association had received a communication from the sports ministry, raising objection to the posts of life presidents and life vice presidents.
The AITA, along with 10 other NSFs, was invited by sports secretary Radhey Shyam Julaniya for a video conference on Thursday.
Exasperated at AITA's decision to remove him, though he was available for the job at a neutral venue, Bhupathi said it is not acceptable to him that he is being fired for not showing up for duty.
With captain Bhupathi also pulling out for the same reason, AITA went ahead and named Rohit Rajpal as new captain for the tie at its Executive Committee on Monday in Chandigarh.
Men's squad captain Zeeshan Ali chose Rohan Bopanna and Divij Sharan as one team while Paes and young Sumit Nagal were named as the other team.
Recognition is given almost a year after the tennis body's renewal was put on hold due to non-compliance with the contentious Sports Code.
Amritraj said it was difficult to raise money for tennis in India and AITA's decision was very unfortunate.