20:7a

So they answered that: The phrase So they answered that introduces what the Jewish leaders concluded from their reasoning in 20:6. They told Jesus their conclusion in 20:7b. Introduce their answer to Jesus in a natural way in your language.

20:7b

they did not know where it was from: The Berean Standard Bible translates this phrase as indirect speech. However, the Greek is more literally “We do not know from whence.” For example:

We don’t know where it was from. (New International Version)

The Jewish leaders did not believe that John’s authority to baptize people was from God, and they were afraid to say that it was from people. So they simply said that they did not know where John’s authority to baptize came from.

The word it refers to John’s authority to baptize. In your translation, it may be necessary to make this explicit. For example:

We(excl) do not know where ⌊John’s authority to baptize people⌋ came from.
-or-
We do not know who sent John to baptize ⌊people⌋.

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