The Comptroller and Auditor General of India (CAG) is responsible for acting as the chief accountant and auditor for the Union and State Governments of India. This means that the CAG performs financial audits and ensures that the government`s financial transactions are accurate, transparent, and in accordance with the law.

Option 1, which suggests that the CAG only acts as the chief accountant and auditor for the Union Government, is incorrect because the CAG`s role extends to both the Union and State Governments.

Option 2, which suggests that the CAG only acts as the chief accountant and auditor for the State Government, is also incorrect for the same reason.

Option 4, which suggests that the CAG does not act as the chief accountant and auditor for either the Union or State Governments, is also incorrect.

Therefore, the correct answer is option 3, which states that the CAG acts as the chief accountant and auditor for the Union and State Governments.