In the notice, the company was asked why the Rs 3,600 crore deal of 2010 should not be scrapped.
In its reply, AgustaWestland had denied the allegations. Former IAF chief S P Tyagi is among those under cloud in connection with the kickback charges.
The CAG also recently highlighted loopholes in the deal.
Soon after the arrest of the firm's former CEO, Guiseppe Orsi, in Italy in connection with the case, Defence Minister A K Antony had suspended the payments to be made to it along with the delivery it was due to make to IAF of the remaining nine choppers.
