Who made the observation that there must be very large empty space within the atom ? 

The correct answer is Rutherford.

Explanation - 

Rutherford Atomic Model - 

• Rutherford carried out an experiment in which he bombarded a thin sheet of gold foil with alpha particles and then analysed the track of these particles after they collided with the gold foil.
• In his experiment, Rutherford focused on high-energy alpha particle streams from a radioactive source at a thin sheet of gold (100 nm thickness).
• He wrapped a fluorescent zinc sulphide screen around the thin gold foil to investigate the deflection generated by the alpha particles.
• Certain observations obtained by Rutherford contradicted Thomson's atomic hypothesis.
• Rutherford's observations lead him to the following conclusions:

1.  Because a large portion of the -particles fired at the gold sheet passed through it without being deflected, the majority of the space in one atom is vacant.
2. The gold sheet deflected some of the -particles at minor angles, causing the positive charge in each atom to be unevenly distributed. In an atom, the positive charge is concentrated in a relatively small volume.
3. Only a few -particles were deflected back, implying that only a few -particles had almost 180^o deflection angles. As a result, the positively charged particles in an atom occupy very little volume in comparison to the entire volume of the atom.

• Hence, the correct answer to this question is - Rutherford.