In 1998, a complaint was made to the East Coast Area Health Board against Fr Upsilon by a man who said he was abused over eight years in the late 1970s and early 1980s.
Denis withdrew the allegations in a statement to gardaí and also spoke to the diocese about the withdrawal. The diocese asked the priest to stand down from his ministry pending an investigation.
The inquiry said that it was appropriate that allegations of child sexual abuse that have been withdrawn should still be investigated.
"Social pressures may cause complainants to withdraw allegations and in the interests of child protection, such withdrawals should not be regarded as decisive," it said.