Shah, in whose film "Namaste London" Katrina is playing an important role, offered his apologies to the management of the Khwaja Moinudeen Chishti's Sufi shrine.
"The director has felt sorry. So all actions supposed to be taken against the film crew has been dropped," Abdul Alim Dargaha Nazeen told on telephone from Ajmer.
The controversy erupted when Katrina visited the dargah in October with her co-star Rishi Kapoor to shoot for "Namste London".
During the shoot, Katrina had a 'dupatta' on her head but her legs were not properly covered as she had a knee length skirt.
Her attire irked the dargha committee who found her costume objectionable and disrespectful vis-à-vis the shrine.
The film will have the original scene of Katrina offering prayers at the dargah.