Lokayukta Justice Manmohan Sarin's order came in a case pertaining to the minister's alleged involvement in influencing a team of tax officials to provide relief to the resort in a tax evasion case.
"In his order, the Lokayukta has recommended to President of India to withdraw her pleasure in allowing the minister to continue as a minister in Delhi Government," a top official in Lokayukta told PTI.
The Lokayukta had taken suo motu action on media reports that VAT Commissioner Jalaj Srivastava had written to the Delhi Government saying that a minister had asked him to recall enforcement team from the survey.
Srivastava had later named Chauhan as the Delhi minister who had called him to intervene during the survey.
In his report to the government, Srivastava had said the minister told him over phone to "intervene" in the alleged tax evasion case against Tivoli Garden Resort hotel in South Delhi.