I gave up on this for sometime but i finally managed to upgrade and i am glad to share the procedure here for all those who are looking to do same thing but finds its difficult..its not a commonly used device but very handy at times...
In the begining i was trying to upgrade ata sccp 3.1.0 to sip 3.2 and it never worked so after doing a lot of reading and searching through forums i thought about using a lower version and it paid off.
I had my ATA 186 (sccp ) connected on my internal home network on netgear wireless router so it was on internal dhcp server to get the ip address, my laptop was also connected on same network. First thing i had to do was access ata through web http://x.x.x.x/dev where x.x.x.x is ip address of ATA.
next you have to create a ata configuration file using procedure explained below