Hi Aditi, First of all you need to know the difference between IIM and CAT. IIM ( Indian Institute of Managemnet ) is a management institute and CAT ( Common Admission Test ) is a computer based test in India held by IIMs. There is a group of 20 IIMs in India that conducts an examination named "CAT" and on the basis of its score, students are selected for mangament programs. 

Now coming to your question, from the above explanation your question should now be " Can we re-appear for CAT while doing MBA from XYZ college? " 

My answer to this would be :

YES. Nothing stops you from doing this.

Just keep in mind the various risks and costs.

1. Fees and time.
2. You could end up not getting selected next year and not doing well + enjoying 1st year at your current college.

Not meant to scare you. Just be aware. I even know of students who have done this successfully in the past. And this is one of the suggestions I make to some students.