Answer D as priority of $!=$ is greater than that of $\&\&$ in C. The execution happens as:
if ((*a) && (*a != ' '))
So, the if breaks either when $*a = 0$ (not '$0$' but ASCII $0$ or null character '\0'), or when $*a =$' '.
So, the recursive call goes like
$\text{'A' - 'B' - 'C' - 'D' -' '}$ (breaks) and then starts outputting
$DCBA$