Concept:
For distortionless transmission, the output should be an attenuated and delayed version of the input.
Mathematically,
\[
y(t)=Kx(t-t_0)
\]
where \(K\) is a constant and \(t_0\) is delay.
Step 1: Determine magnitude condition.
The magnitude response must be independent of frequency.
\[
|H(\omega)|=K
\]
Thus gain must be constant.
Step 2: Determine phase condition.
The phase response must be linear.
\[
\phi(\omega)=-\omega t_0
\]
A linear phase ensures equal delay for all frequency components.
Step 3: Final Answer.
Therefore,
\[
\boxed{\text{Gain constant and phase linear}}
\]
Hence,
\[
\boxed{\text{Correct Option (D)}}
\]