What exactly does your app do? (please provide a VERY detailed description)
If your app is not designed to replace the built-in SMS app of a user's phone and offer the same functionality as the built-in SMS app, then that's why it was rejected.
Google will only allow an app to send an SMS message if that app is configured as the default SMS message app on the user's device. If your app doesn't replace the user's main SMS app, then your app will not be allowed to send SMS.
So it looks like they rejected your app because your app didn't appear to offer all the functions of a typical SMS app (send and receive SMS/list message threads, etc).