When we're reporting a speech, we're narrating things that happened or were said in the past. So, the speech will go one tense back.
In reported speech, we add a reporting verb (usually 'said'), the subject changes in narration ('he', 'she', 'it' or 'they') and the related words also change.
Option C: For reporting Sumit's speech, the third point of view 'it' remains the same. 'Is' is in the simple present and changes to 'was', the simple past verb. ('It's' is a contraction of 'it is'.)
So, the correct reported speech for the sentence "Yes, it's quite good." is:
'Sumit replied in the affirmative that it was quite good.'
'Yes' does not have an indirect counterpart and is hence changed to the words 'in the affirmative'.
Hence option C is correct.
Option A: 'Had been' expresses the past perfect tense whereas the sentence goes only one tense behind, from simple present tense 'it's' to simple past 'it was'.
Option B: 'Has been' expresses the present perfect tense whereas the sentence must be in the past.
Option D: 'Were' is a plural verb and is used when the subject of that verb is also plural. But the subject here 'it' is singular.
Hence options A, B and D are incorrect.