According to the official NTA answer key, Option 3 is marked as correct:
Assertion (A) is scientifically correct: Under prolonged waterlogging, molecular oxygen is depleted, creating anaerobic reducing conditions. Ferric iron ($\text{Fe}^{3+}$, red/brown) is reduced to soluble ferrous iron ($\text{Fe}^{2+}$) or gley compounds, imparting a characteristic grayish, bluish, or greenish hue (gleying process).
Reason (R) states that upland soil maintains a reddish or brownish hue due to its well-aerated nature. While upland aeration does keep iron oxidized as ferric oxides (hematite/goethite), the official answer key designated (R) as not correct in the context of this question.
(Official Answer Key: Option 3).

When a soil is submerged:

• Depletion of molecular oxygen ($\text{O}_2$) occurs first within a few hours to days as aerobic microbes consume the trapped dissolved oxygen.
• Loss/decline of beneficial aerobic soil organisms (obligate aerobes, earthworms, aerobic nitrifiers) follows as oxygen reaches near-zero levels.
• Anaerobic microbial respiration utilizes alternative electron acceptors ($\text{NO}_3^-$, $\text{Mn}^{4+}$, $\text{Fe}^{3+}$, and finally $\text{SO}_4^{2-}$), causing reduction of sulfate to toxic hydrogen sulfide ($\text{H}_2\text{S}$).
• The continuous consumption of protons during ferric iron and sulfate reduction causes the pH of acidic soils to steadily rise towards neutrality ($pH \approx 6.5 - 7.0$).