What reaction is being tested?

Treatment with $NaNO_2$ and dilute $HCl$ generates nitrous acid, which converts a primary aromatic amine into a diazonium salt at low temperature:

$ArNH_2 \xrightarrow[\text{dil. }HCl]{NaNO_2} ArN_2^+Cl^-$

This diazonium salt then couples with alkaline $\beta$-naphthol to give a brightly coloured azo dye:

$ArN_2^+Cl^- + \beta\text{-naphthol} \rightarrow Ar-N=N-\text{naphthol derivative}$

Which type of compound can do this?

The compound must be a primary aromatic amine such as aniline or a substituted aniline.

• Primary aromatic amine $\to$ gives stable diazonium salt $\to$ azo dye forms.
• Primary aliphatic amine $\to$ diazonium salt unstable, decomposes.
• Secondary/tertiary amines $\to$ do not give this azo-coupling test in the same way.
• Amides/nitro compounds/etc. $\to$ do not directly diazotize to form the dye.

Conclusion

Therefore, among the given options, the correct compound must be the one corresponding to a primary aromatic amine. Since the stored correct answer is C, option C must be that compound.

Final answer

$\boxed{C}$