Tracking a launch vehicle is of paramount importance, not only for knowing the instantaneous position of the vehicle, but also for taking appropriate and critical real time decisions related to Range safety. Tracking System also provides antenna positioning information for Telemetry, Telecommand and Optical Tracking stations. Active tracking systems consisting of C Band Radar ground station and onboard C Band Transponder provide the necessary input data in real time to the Range Safety Officer for taking necessary decisions. In the ascent phase of Launch Vehicle mission, during the transonic regime, sporadic interrogation is registered on onboard C-Band Transponders and large number of extra echo pulses are observed on Radar displays. Large fluctuations are also observed in signals received onboard and at ground during this time period. Response of the onboard transponders to the additional interrogation pulses lead to the original uplink pulse being missed, thereby causing loss of track by Radars. This paper discusses on the tracking system, the observations during transonic regime, its analysis and the unique solution implemented. Pulse position coding technique has been successfully employed in a novel way in the tracking system to overcome the difficulties caused due to erroneous interrogation and the design has been effectively demonstrated in flight.