Step 1: Conversion of ammonia to nitrite and then to nitrate is called nitrification, not denitrification. Denitrification is the reverse process where nitrate is reduced to gaseous nitrogen. So Statement (I) is incorrect.
Step 2: In well aerated soils, nitrate is the form of nitrogen present in largest amount and most readily taken up by plant roots, so Statement (II) is correct.
Step 3: Statement (I) is incorrect but Statement (II) is correct, so the answer is option 4.