Elie learns very quickly that, in the camps, it's better to keep your head down and not attract too much attention. So when a gypsy kapo brutally knocks his father to the floor, he does nothing and says nothing. Elie has managed to suppress his instincts to intervene, and it's just as well too.

For the kapo, though a prisoner himself, has authority over the other prisoners. In a classic example of divide-and-rule tactics, this is a way for the Nazis to keep the camp inmates firmly in check. Under the circumstances, then, it would be every bit as dangerous for Elie or anyone else to challenge a kapo as it would be to challenge a German. So Elie does nothing after his father is so brutally assaulted by the gypsy.

That said, he can't change how he feels. His emotional reaction to what's happened is one of shame and guilt. But in due course, he must somehow learn to live with such feelings, as such savage treatment can be dished out at the drop of a hat. Indeed, the kapo's attack on Elie's father foreshadows a similar episode later on in the story, when an S.S. officer beats Elie's father to within an inch of his life. Once again, Elie can only look on in impotence, unable to lift a finger to help his father.

Elie does nothing when his father is struck. In fact, his inability or unwillingness to defend his father gives him pause:

What had happened to me? My father had just been struck, in front of me, and I had not even blinked. I had watched and kept silent. Only yesterday, I would have dug my nails into this criminal's flesh. Had I changed that much? So fast?

Elie has internalized the rules of the camp, the first of which is, do not attract attention to yourself. This incident occurs after brief orientation to life at Auschwitz, where an SS officer has explained that they each have a choice, "Work or the chimney!" In such a place, where brutality is the only constant, Elie learns quickly that any attachment, even to his father, can make himself a target. He is ashamed, but also filled with a burning rage: "I shall never forgive them for this." His father, understanding his shame, is quick to say that he is not hurt; but pain is not what Elie is angry about: he is angry about his sudden transformation from a human with dignity into little more than a beast of burden.

Shortly after arriving at Auschwitz, Elie and his father are directed to a specific barrack, where they are given their prison uniforms and informed that they will be working in the concentration camp. After being transferred to another barrack, a Gypsy inmate is put in charge and his father has a sudden colic attack. After Elie's father politely asks the Gypsy in charge to go to the restroom, the Gypsy strikes him hard across the face with such force that he falls to the ground. Elie is both shocked and petrified after witnessing his father get slapped across the face and stands still, unable to move or ascertain what just happened. Elie also recalls thinking that he will never forgive his father for provoking the Gypsy's wrath. In an attempt to ease his son's pain and anger, Elie's father whispers into his hear that it didn't hurt.

This is a good question. Here is a little context. When Elie, his father, and the other prisoners came into the barrack of the camp that they were staying, a gypsy was in charge. He gave permission for the people to sit. When Elie's father asked to use the bathroom, the gypsy struck him out of nowhere.

When the gypsy struck Elie's father, Elie did nothing. He just looked on, and let it happen. The reason why Elie did nothing was because he was shocked. He did not know what to do. Also what could he do? 

Elie's father knowing that Elie was in a state of shock and guilt (for doing nothing), whispered to Elie that he was fine and the that slap in the face did not hurt. 

Here is the quote from the work, to give you the drama unfold. The Gypsy stared at him for a long time, from head to toe. As if he wished to ascertain that the person addressing him was actually a creature of flesh and bone, a human being with a body and a belly. Then, as if waking from a deep sleep, he slapped my father with such force that he fell down and then crawled back to his place on all fours.

I stood petrified. What had happened to me? My father had just been struck, in front of me, and I had not even blinked. I had watched and kept silent. Only yesterday, I would have dug my nails into this criminal's flesh. Had I changed that much? So fast? Remorse began to gnaw at me. All I could think was: I shall never forgive them for this. My father must have guessed my thoughts, because he whispered in my ear:

"It doesn't hurt." His cheek still bore the red mark of the hand.