The BCCI reported Smith and Peter Handscomb, who told his batting partner to seek illegal advice, on Thursday.
The International Cricket Council (ICC) and match referee had cleared all 22 players involved in the heated clash, urging everybody to move on.
But the brinkmanship that threatened to turn ugly ended when Sutherland and counterpart Rahul Johri thrashed out their differences at the BCCI headquarters.
The two organisations released a joint statement early yesterday.
"BCCI will withdraw the complaint filed with ICC with an expectation that the two captains will meet prior to the Ranchi Test and commit to lead their teams by example," it noted.
"And play the rest of the series in the right spirit, demonstrating that the players from both teams are true ambassadors for their respective countries."
It may be wishful thinking given how much ill-will has been generated by the match and its acrimonious postscript.
Not since the Monkeygate saga of 2008, when India threatened to return home from Australia, have relations been the teams been so poor.
"On the field the two teams are fierce competitors who represent their countries with pride. As we have seen this week in Bangalore, with so much at stake, tensions can bubble over," Sutherland said in the joint statement.
"We are halfway through what has already been a riveting series.
"In discussing the relevant issues in depth, we have agreed that it is in the best interests of the game to put these differences aside and clear the way for the focus to be on the cricket, and the remaining matches."
Johri noted "the focus of the teams and the joy they provide to the fans should not be diluted".
"It is imperative to ensure that the rest of the series, which promises a great cricketing contest, not be compromised."
Smith and Kohli will sit down with Richie Richardson, who is replacing Chris Broad as match referee for the third and fourth tests, next week.
"The match referee will bring both captains together to remind them of their responsibilities to the game," ICC chief David Richardson said earlier this week.
The four-test series, level at 1-1, continues in Ranchi next Thursday.
- AAP