Section 149 is one of the widest liability provisions in the Penal Code, but it is not unlimited. Everything hangs on one phrase: in prosecution of the common object. Keep that phrase in view and the two statements sort themselves out quickly.
The section has two limbs. Under the first, an offence committed by any member in prosecution of the common object binds every member. Under the second, an offence that the members knew was likely to be committed in prosecution of that object also binds them all. Both limbs run through the common object. The assertion says exactly this, so it is sound.
The reason quietly deletes that link. On its wording, a sudden and provocative act by one man would drag in everyone else, no matter what the assembly had gathered to do. Test it with an example. Five men assemble to forcibly harvest a disputed crop. One of them, on seeing an old personal enemy walk past, breaks away and stabs him. That stabbing has nothing to do with the harvesting. It was not in prosecution of the common object and nobody knew it was likely to happen in prosecution of that object. The knifeman answers for it alone; the other four do not.
The wider point is that Section 149 is not insurance against every independent act of every companion. Constructive liability travels only along the channel of the common object, and a sudden individual impulse falls outside that channel.
Let's summarize:
So the assertion stands, the reason falls, and option (C) is the answer.