"La La Land", which won six trophies including best director and actress was incorrectly declared the best picture winner by Warren Beatty and Faye Dunaway at the ceremony.
However, midway through their victory speech, the musical's one of the producers, Jordan Horowitz, realised the error and announced that the award belonged to "Moonlight".
Minutes after the shocking goof-up, Bollywood celebrities took to Twitter to throw their sarcasm and humour.
A shocked Azmi posted,"What? I just cant believe what happened at the Oscars!!!"
Johar tweeted, "That was the most ridiculous and hysterical goof up in the history of the academy awards!!!!! #oscarbooboo."
While, Farah hilariously reacted by writing, "#Oscars saving the best moment for last! At least this doesn't happen in our award shows... We just give to whoever is still there in audience."
Sood Sood said, "OMG!!! It happened in OSCARS??? announce a wrong winner for the #thebestpicture #Moonlight vs #lalaland @TheAcademy #Oscars2017."
Actress Saiyami Kher tweeted, "Did this really happen? #Oscars #lalaland #moonlight."