CONCEPTS:  The question tests the basics of Average/A.M

SOLUTION:
 

Let the three numbers be (x-d),x,( x +d)
"d" is the space.

Average = (x-d)+x+(x+ d)/3 = 12
=> x=36/3=12

According to the question:
(x+d) = 2(x-d)
=> x=3d
Using x=12 from (i) we have d=4

Substituting the values-
(12+4) , 12 , (12-4)
16 , 12 , 8
 Hence the smallest number is 8. OPTION (C)