The correct option is C 27 cm
We know that,
Guage pressure= Absolute pressure-Atmospheric pressure
Let, atmospheric pressure be Po and height of water in the tank is h.
Now, absolute pressure at bottom of the tank =Po+ρgh
So, Guage pressure =Po+ρgh−Po=ρgh
Therefore,
2.7×103=1000×10×h
[∵ρ=1000 kg/m3 for water]
⇒h=0.27 m=27 cm