The correct option is D It was unable to resolve differences over the formation of Coalition Interim Government.
The 1946 Cabinet Mission to India for the planning of the transfer of power from the British Raj to the Indian leadership proposed an initial plan of a composition of the new Dominion of India and its government. However, soon an alternative plan to divide the British Raj into a Hindu-majority India and a Muslim-majority Pakistan was proposed by the Muslim League. The Congress rejected the alternative proposal outright. The Muslim League planned a general strike on 16 August, terming it as Direct Action Day, to protest this rejection and assert its demand for a separate Muslim homeland.
The Action resulted in the worst communal riots that British India had seen.