The court, which heard the appeal on Wednesday, said it was swayed into reinstating the point because of the "huge efforts" Beitar was making to combat its own fans' racist behaviour.
The punishment, which now stands at two suspended points for the current season and next season, was imposed after Beitar fans chanted anti-Arab slogans at two league fixtures earlier this year against Hapoel Tel Aviv and Hapoel Ramat Gan.
Beitar have the worst disciplinary record in Israel's Premier League. Since 2005 they have faced more than 20 hearings and have received various punishments, including points deductions, fines and matches behind closed doors.
Beitar were Israel's richest club until three seasons ago when their main financial backer, Russian-born billionaire Arkady Gaydamak, stopped most of his funding, although he continues to own the club.
