The correct option is B Only II
Statement I: The pinhole camera makes the image of an object appear upside down. But this effect cannot be observed in case of horizontally symmetrical objects, i.e. objects whose lower half is identical to the upper half won't go any inversion in the pinhole camera. So, the image of the sun won't undergo any inversion in a pinhole camera since it is spherical in shape and spheres are symmetrical.
Statement II: The pinhole camera can form images of any size, not just point-sized, eventhough the aperture of the camera is of the size of a pinhole.
Therefore, only the statement II is incorrect.