Indian hopes were further dashed when NRI editor Tariq Anwar failed to bag the Best Film Editing trophy for the British drama `The King`s Speech`, which went to Angus Wall and Kirk Baxter of `The Social Network`.
Rahman, dressed in a black sherwani, performed his nominated track `If I Rise` from the the Danny Boyle film `127 Hours` with British popstar Florence Welch to much applause.
But the 45-year-old lost the Best Song trophy to Randy Newman who won for his composition `We Belong Together` from `Toy Story` 3.
The golden statuette for the Best Original Score went to composer duo Trent Reznor and Atticus Ross who won for their soundtrack in the fantasy blockbuster `The Social Network`.
Rahman was hoping to repeat his golden run at the 2009 Oscars, where he won two statuettes for his music in another of Boyle`s film, the Mumbai based potboiler `Slumdog Millionaire`.
The `Mozart of Madras` missed the golden trophy last year too, after his song `Na Na` (from `Couple`s Retreat`) failed to get a nomination despite being in the long list for the `Best Song` category.
Earlier this year, the `Jai Ho` hitmaker had lost out on a Golden Globe for Best Score to Trent Reznor and Atticus Ross, but won a Critics Choice award for the "haunting tracks" and "wonderful crescendos" of `127 Hours`.
Rahman had won a BAFTA nomination for the same, but had lost the trophy to Alexandre Desplat, who won for his score in `The King`s Speech`.
Rahman, who was honoured with a Padma Bhushan last year, had also enjoyed a golden run at the 52nd Grammy Awards, where he had again bagged two gramophones for his music in `Slumdog Millionaire`.
`127 Hours`, starring James Franco as real-life mountain climber Aron Ralston, who cut off his arm to escape from beneath a boulder after being trapped for more than five days, had won six nominations including Best Film, but returned empty handed just like Rahman.
Earlier `Peepli Live`, India`s official entry to the Oscars had failed to make it to the final nine films which were nominated in the Best Foreign Film category, which was finally won by Danish film `In a Better World`.