Sikhs are also upset because the level looks very similar to a 1984 massacre inside the Golden Temple in Amritsar in India, when hundreds of Sikhs were killed by Indian police.
Now shops like PC World and Woolworths have decided to stop selling the game, with Woolies saying they banned the game after CBBC's Newsround told them about it.
The company that make the game, Eidos, say the level won't be in the new version for the GameCube and have promised to take it out of new copies for other formats.
Games company have said sorry
They've also said sorry to all Sikhs - but haven't commented on whether they'll take the game off the shelves completely.