I think you've provided a good synopsis of some of the issues being discussed here.
Just to address your last point, though, you wrote:
<i>"now, my question is,
mamallapuram dates back to 700 AD. on what grounds NIO assigned the date 1200 even if the though it belonged to pallava dynasty."</i>
The NIO statement reads:
<i>"The possible date of the ruins may be 1500-1200 years BP. Pallava dynasty, ruling the area during the period, has constructed many such rock cut and structural temples in Mahabalipuram and Kanchipuram."</i>
Unless I'm mistaken, BP refers to 'Before Present' (ie. 1500-1200 years ago, <i>not</i> 1200 AD or even, for that matter, 1200 BC). So the date they've proposed ties in quite neatly with the dating of Mamallapuram to 700 AD.
Hope that helps.