The one-member panel, to be headed by judge Kailash Uttamchand Chandiwal (retd), is given the time of six months to submit its report to the state government, an official order said.
In his letter to Chief Minister Uddhav Thackeray, days after he was transferred as Mumbai police chief before the end of his term, Singh alleged that Deshmukh had given a target to collect Rs 100 crore from bars and restaurants to Mumbai police officer Sachin Waze.
Deshmukh had denied the allegations.
The NIA is probing the alleged role of Waze, who was arrested on March 13, in parking an explosives-laden vehicle outside the south Mumbai residence of industrialist Mukesh Ambani on February 25 and in the murder of businessman Mansukh Hiran, who purportedly owned that vehicle.
Hiran’s body was found in the creek in Mumbra in Thane district on March 5.
Singh had first approached the Supreme Court and later the Bombay High Court seeking a probe by the CBI against Deshmukh.
Earlier in the day, the HC said it would hear on Wednesday the PIL filed by Singh.