I have checked the SIP phone's settings, I do not find anything wrong there.
What could be the reason? Is this because of some SIP phone setting? Here is the freeswitch log,
2015-01-19 09:33:39.671681 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [1]
2015-01-19 09:33:39.671681 [DEBUG] switch_channel.c:488 RECV DTMF 1:2000
2015-01-19 09:33:39.851686 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [1], duration = 191 ms
2015-01-19 09:33:40.071688 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [4]
2015-01-19 09:33:40.071688 [DEBUG] switch_channel.c:488 RECV DTMF 4:2000
2015-01-19 09:33:40.251687 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [4], duration = 153 ms
2015-01-19 09:33:40.431699 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [7]
2015-01-19 09:33:40.431699 [DEBUG] switch_channel.c:488 RECV DTMF 7:2000
2015-01-19 09:33:40.631680 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [7], duration = 204 ms
2015-01-19 09:33:40.851688 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [4]
2015-01-19 09:33:40.851688 [DEBUG] switch_channel.c:488 RECV DTMF 4:2000
2015-01-19 09:33:40.971695 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [4], duration = 127 ms
2015-01-19 09:33:41.151691 [DEBUG] switch_core_session.c:1053 Send signal sofia/internal/
sip:278@192.168.2.86:5060 [BREAK]
2015-01-19 09:33:41.171701 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [7]
2015-01-19 09:33:41.171701 [DEBUG] switch_channel.c:488 RECV DTMF 7:2000
2015-01-19 09:33:41.351680 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [7], duration = 191 ms
2015-01-19 09:33:41.371686 [DEBUG] switch_ivr_play_say.c:1314 Codec Activated L16@8000hz 1 channels 20ms
2015-01-19 09:33:41.691686 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [#]
2015-01-19 09:33:41.691686 [DEBUG] switch_channel.c:488 RECV DTMF #:2000
EXECUTE sofia/internal/
392@3427.vbiz.mundio.com flush_dtmf()
2015-01-19 09:33:41.691686 [DEBUG] switch_ivr_play_say.c:1314 Codec Activated L16@8000hz 1 channels 30ms
2015-01-19 09:33:41.711684 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [#], duration = 38 ms
2015-01-19 09:33:41.771683 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [#]
2015-01-19 09:33:41.771683 [DEBUG] switch_channel.c:488 RECV DTMF #:2000
2015-01-19 09:33:41.771683 [DEBUG] switch_ivr_play_say.c:1747 done playing file file_string:///root/united_fone/voice_files/en//CR_enter_conf_pin.wav
2015-01-19 09:33:41.771683 [DEBUG] switch_ivr_play_say.c:1314 Codec Activated L16@8000hz 1 channels 30ms
2015-01-19 09:33:41.811686 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [#], duration = 25 ms
2015-01-19 09:33:41.871691 [DEBUG] mod_spandsp_dsp.c:373 DTMF BEGIN DETECTED: [#]
2015-01-19 09:33:41.871691 [DEBUG] switch_channel.c:488 RECV DTMF #:2000
2015-01-19 09:33:41.951681 [DEBUG] mod_spandsp_dsp.c:385 DTMF END DETECTED: [#], duration = 76 ms