The correct option is
D Both Assertion and Reason are incorrect.
Viruses are considered neither prokaryotes nor eukaryotes because they lack the characteristics of living things, except the ability to replicate which they accomplish only in living cells.
A virus is a small infectious agent that replicates only inside the living cells of other organisms. Viruses can infect all types of life forms, from animals and plants to microorganisms, including bacteria and archaea.
Virus particles (known as virions) consist of two or three parts:
i) the genetic material made from either DNA or RNA, long molecules that carry genetic information
ii) a protein coat that protects these genes; and in some cases
iii) an envelope of lipids that surrounds the protein coat when they are outside a cell. Thus, option D is correct.