How does sonar detect direction of underwater objects?

Although bats, dolphins and some blind folks have used an active sonar (SOund Navigation And Ranging) system for many years (they make little squeaks or clicks and listen for the returning echos) The equivalent mechanical electrical system (ASDIC) was developed in the early years of the 20th century. The system uses both the speed of the returning echo and changes in the frequency of the returning sound to detect location, and direction of the detected object

A passive system (just listening) is used by most animals and birds. Leonardo da vinci proposed a directional listening tube to detect the approach of ships.

In general, only Passive Sonar is primarily used aboard modern submarines due to the noise factor; active pings work both ways for detection much the way tracer bullets do. Passive Sonar can tell you a lot about a target though; bearing (location), type of target (merchant vessel, trawler, warship, submarine, etc.), speed (turncount if it's a surface ship), Angle on the Bow, bearing rate, range (over time after plotting). Active Sonar is only used to verify target range prior to shooting a torpedo.

Passively listening to a target, you can also tell its direction by doppler sound effect, i.e., whether or not it's getting closer or moving away, by volume and frequency pitch. You normally assume that the target is closing on your position; if it wasn't, you wouldn't have detected it.