From the evolutionary point of view, retention of the female gametophyte with developing young embryo on the parent sporophyte for some time, is first observed in _______________.

Correct option is C. Pteridophytes
In Pteridophytes, megaspore is retained for some times in female gametophyte. However, the permanent retention is required for seed formation and hence seed is not formed.
That's why Pteridophytes are said to be precursors of seed habit.
So, the correct answer is 'Pteridophytes'