I misread the options and clicked 'These dogs are sitting boy this car'. My mistake, but would 'by this car' be an acceptable translation of इस गाड़ी के पास ?
The Hindi sentence uses simple present, not present continuous. Should be 'sit', not 'are sitting'?
My understanding is that using the present continuous with verbs of posture (sitting, standing, lying, etc.) means that you're talking about the process of getting into that posture, while the simple present indicates that they're in the posture ongoing.
So, ये कुत्ते इस गाड़ी के पास बैठ रहे हैं would mean "the dogs are [currently in the process of] sitting down near the car"—a valid sentence, but an oddly specific thing to comment on if you're trying to indicate location.
As someone has already suggested, "These dogs are sitting next to this car" should be accepted.