The present continuous tense is formed with the subject plus the present particle form (-ing) of the main verb and the present continuous tense of the verb to be: am, is, are.
In this particular sentence, we can understand that the question is based on something which is happening. The present continuous tense is a grammatical tense that can be used to describe when an action happened, or may happen. You can use it to describe both events that are happening in the present – right now, while you are talking about something, or in the future – something that may or will happen later on. So, we would be using present continuous tense for the given blank.
Now, in continuous tense, the verb always ends with an '-ing', thus this would eliminate option B. "Was" and "Had" are only used in case of past tense, which makes, C the correct answer