Top Delhi government sources said a detailed report has been sent to the Home Ministry, which has directed the city administration to file its response in the matter.
The Home Ministry's direction to the Delhi Government came late last month, nearly two months after Lokayukta Justice Manmohan Sarin had recommended to President Pratibha Patil to "withdraw her pleasure" for the Minister to continue in office as he "misused" his official position and indicted him for misconduct of "grave nature".
The decision on Chauhan's fate lies with the President, who has three months time to take action. The communication from the Home Ministry, officials said, is part of the decision making process by the President which is expected to be completed by the end of May.
Justice Sarin's order in late February had come in a case pertaining to Chauhan's alleged involvement in influencing a team of tax officials when they were carrying out a survey in Tivoli Garden resort in South Delhi in February last year.
The opposition BJP has been pressing for Chauhan's removal since issuance of the order by the Lokayukta and had even targeted Chief Minister Sheila Dikshit for not sacking him.
Chauhan, who represents Mangopuri Assembly constituency in Outer Delhi, is considered close to Dikshit and was given the Urban Development portfolio in the recent reshuffle of the Cabinet even as he was facing criticism for alleged irregularities in certain CWG projects implemented by his Public Works Department.
The CBI had on April 30 registered a case against some officials of the Public Works Department (PWD) and a few firms in connection with alleged irregularities in the project for construction of the Rs 620 crore Barapullah Nullah flyover for the Commonwealth Games.
The Lokayukta order had said that "the Minister made a telephone call to the Commissioner of Trade of Taxes in the evening of February 20 last year when a team of tax officials were carrying search and survey at the premises of Tivoli Garden Resort to unearth huge evasion of taxes and concealment of income."
In his defence, Chauhan said as public representative, he gets lots of calls from people requesting for favours and he only responded to such a call.
Following the Lokayukta order, Dikshit had attacked the Lokayukta and even said that there was a need to look into the functioning of the body and to make it "more transparent" and "just".