The decision was taken as the Income-Tax Department found that a huge outstanding demand was not recoverable.
The committee has been asked to examine the possibilities of engaging outside agencies to locate the whereabouts of non-traceable assessees or their assets and also unknown/undisclosed assets owned by the assessees, with inadequate assets against their outstanding demand.
It will also examine the feasibility and methodology of putting the names of chronic tax defaulters in public domain.
"To examine certain suggestions on income tax demand, classified under the categories 'assessees not traceable' and 'No assets/inadequate assets for recovery', a committee has been constituted by the Central Board of Direct Taxes," the finance ministry said in a statement.
It said in the current wave of transparency and anti-corruption drive, there was a demand to put the list of chronic defaulters in the public domain, as this would put onus on taxpayers to liquidate their demand.
The terms and conditions of the committee include suggesting modalities for utilisation of the information available with the Finance Intelligence Unit (FIU)-India and the Directorate of Income Tax (systems)
for the recovery of outstanding demand in such cases.
The panel, headed by Anita Kapur, Director General of Income Tax (administration), CBDT, will propose a reward scheme for informants, who supply information about such tax defaulters and which results into collection of the outstanding demand.
It will propose a scheme for regulating the outsourcing work for its administration by the field formation.
Other members of the committee are Director of Income Tax (recovery) Sheba Bhattacharya, Director of Income Tax (systems) Harish Kumar, Director (ITCC) Deepak Garg, a nominee of FIU-India, and additional Director of Income Tax (recovery) H A Siddiqui. It will submit its report in two months.
The ministry said attempts were being made from time to time to recover this outstanding demand by using the asset and bank information available with FIU and Annual Information Report data.
The list of defaulters is also matched with the asset data available.
"There is a good possibility to locate some assets to realise this outstanding demand. To further achieve this objective, synergy in the functioning of Directorate of Recovery, Directorate of Systems, CBDT and FIU is also created," it added.