The notice from the poll panel to the Delhi Bharatiya Janata Party (BJP) comes after he uploaded his campaign song "Bagga Bagga Har Jagah" was uploaded on Twitter minutes after his candidature was announced.
The one minute 53 second song describes the BJP candidate as a "Sardar who wages war on traitors".
In its notice to Bagga, the EC sought a reply within 48 hours as to why the expenditure for the song shouldn't be computed and added to his election expenses.
The notice also states that the decision of the Media Certification and Monitoring Committee (MCMC) will be final on the subject if Bagga fails to reply within the prescribed time.
Speaking to over the EC notice, Bagga said: "They have asked for the expense on the song. But the reality is that the song was made before my candidature was announced, which is a set of collage of pictures taken on different occasions."
He further said that the song was re-posted on his Twitter post after he filed his nomination.
"I respect the Election Commission and our lawyers are preparing the reply for the EC," Bagga said.
Lambasting AAP national convenor Arvind Kejriwal, Bagga said: "They are fearing their defeat in the assembly elections this year and that is the reason why they are complaining to the Election Commission against the BJP candidates."
According to the BJP leaders, Bagga's song has been written by a third-year engineering student named Shashank Dixit, who hails from Lucknow and is studying computer science engineering at a Noida-based college.
From slapping former AAP leader and noted advocate Prashant Bhushan and disrupting Arundhati Roy's book event to selling tea outside Congress headquarters as a protest against Mani Shankar Aiyar's remarks, Bagga has never failed to hog limelight, including for his numerous Twitter spats. Political rivals accuse Bagga of being a "Twitter troll".
The elections for the 70-member Delhi Assembly is scheduled on February 8 and counting of votes will take place on February 11.
The BJP is looking for a comeback in the 2020 polls. In 2015, the party was reduced to 3 seats.
( With inputs from IANS )