The Muslim Welfare Society had wanted to extend the Masjid-e-Umar in Bills Street, Darlaston, and provide increased spaces for the activities because the existing building was no longer fit-for-purpose.
But planning officers at Walsall Council have rejected the scheme because of concerns the development would have an impact on highways safety.
A second reason given for the refusal said the applicants had not addressed concerns about land stability due to previous coal mining activity in the area.
Had the proposal been agreed, an extension would have been built while the height of the property would have been increased to provide roof space and two new minarets built on the front.
It would also have featured two new main entrances fronting Bills Street and away from other residential properties.
Agents Catalyst Design Ltd said: “Generally, the number of people that use the building on a daily basis will not greatly increase with the exception of the proposed much improved facilities for woman and people with disabilities.
“The larger floor area will allow activities to take place without having to overlap into the prayer areas.
“The society will continue to offer the existing services with the five daily prayer from dawn to the night time prayer. The times vary due to the sun rise and sun set in summer and winter.
“The dawn prayer is attended by a small number of people. The main prayer will continue as present after midday on Friday.
“The improved facilities may encourage woman to attend but overall, it is not expected that the number will increase greatly from the present total.
“The larger area will allow activities to be provided for the elderly during the daytime and for the women classes and indoor recreational facilities.
“The main purpose of the proposed extension is to provide separate spaces for the activities of the society.”
But in making the decision, planners said: “The car parking arrangements are detrimental to highways safety by reason of inadequate visibility splay at the car park entrance and inadequate provision with the car park for pedestrian circulation and at the main entrance to the building.
“The submitted plans and supporting information fails to address the potential risks due to the past coal mining activity. Therefore the proposal fails to ensure the safety and stability of the development.”