The DoT decision would come as relief to Tata Teleservies.
The legal opinion was sought by the Department of after it received representations from sections of the industry that the Supreme Court had cancelled 141 2G telecom licences which included 19 licences of Tata Teleservices, and not 122 permits as interpreted by government bodies.
Rao had represented DoT in the Supreme Court in the 2G case.
Sources said Rao in his opinion has said that "the interpretations by various groups including Assocham, TUG, COAI and MD, Idea Cellular of the judgement that 141 UAS licences have been cancelled and not 122 licences as stated in TRAI recommendation is not correct".
"Opinion of senior advocate (P P Rao) has been accepted by Minister for Communications and IT," an official source said.
Rao's opinion is in contrast to the opinion of another Senior Advocate and former Solicitor General Rohinton F Nariman to COAI that said "Supreme Court has quashed all spectrum allocations pursuant to the two press releases dated 10.01.2008 and no exception in this regard was made with respect to TTSL (Tata Teleservices)."
No comment could be immediately obtained from Tata Teleservices.
Based on this opinion, Cellular Operators of Association of India (COAI) on May 23 this year had written to DoT that 141 licences were cancelled by the apex court.
Sources said the Law Ministry has asked the Department of Telecom to wait for the outcome of Presidential Reference (PR) to the Supreme Court in which government has asked if dual technology licences would be affected by Supreme Court judgement of February 2, 2012 which cancelled 2G licences.
"Secretary, Telecom had noted that in view of the advice of Department of Legal Affairs, we may await outcome of PR to SC...." the source said.
The DoT is considering conveying this opinion to organisations which have contested the number of licences cancelled.
COAI's Director General Rajan S Mathews said :"We will wait for Rao's opinion to come to us and see where misapplication has happened with respect to Nariman's opinion as he is a country's very senior lawyer. We will wait for final outcome from Supreme Court."