Clean Chit means “cleared of all wrong doing.”
When a person is accused of something, there is usually an investigation. If during the investigation, or after its completion, the accused is found to be not guilty, then he or she is given a clean chit. Clean Chit basically means that the person is cleared of all wrong doing.
Clean Chit is an Indian term that is not generally used anywhere else. A similar phrase used by traditional English speakers is “clean sheet.” This means to begin with a clean sheet, i.e. without any black (wrong doing) marks on it.
A person who is said to have a Clean Chit or a Clean Sheet at work has an untarnished and impeccable record, which means that he has never been accused of any wrong doing in the first place. In sports, clean sheet means that they have not let the opposing team score any goals.