In the present study we aim to investigate the circumstellar environment of the spectroscopic binary T Tauri star CS Cha. From unresolved mid- to far-infrared photometry it is predicted that CS Cha hosts a disk with a large cavity. In addition, SED modeling suggests significant dust settling, pointing towards an evolved disk that may show signs of ongoing or completed planet formation. We observed CS Cha with the high contrast imager VLT/SPHERE in polarimetric differential imaging mode to resolve the circumbinary disk in near infrared scattered light. These observations were followed-up by VLT/NACO L-band observations and complemented by archival VLT/NACO K-band and HST/WFPC2 I-band data. We resolve the compact circumbinary disk around CS Cha for the first time in scattered light. We find a smooth, low inclination disk with an outer radius of $sim$55 au (at 165 pc). We do not detect the inner cavity but find an upper limit for the cavity size of $sim$15 au. Furthermore, we find a faint co-moving companion with a projected separation of 210 au from the central binary outside of the circumbinary disk. The companion is detected in polarized light and shows an extreme degree of polarization (13.7$pm$0.4 % in J-band). The companions J- and H-band magnitudes are compatible with masses of a few M$_mathrm{Jup}$. However, K-, L- and I-band data draw this conclusion into question. We explore with radiative transfer modeling whether an unresolved circum-companion disk can be responsible for the high polarization and complex photometry. We find that the set of observations is best explained by a heavily extincted low mass ($sim 20 mathrm{M}_mathrm{Jup}$) brown dwarf or high mass planet with an unresolved disk and dust envelope.
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