Step 1: Analyze Statement I.
Benzamide, on reaction with \( \text{Br}_2 + \text{NaOH} \), undergoes Hofmann degradation. This reaction leads to the formation of an amine with one fewer carbon atom than the starting amide, but it does not produce benzylamine. Instead, it yields aniline (a primary aromatic amine). Therefore, Statement I is incorrect.
Step 2: Analyze Statement II.
In the nitration of aniline, the nitronium ion (\(\text{NO}_2^+\)) predominantly attacks the meta position because the amino group is an electron-donating group, which activates the ortho and para positions. However, steric hindrance at the ortho position (due to the large size of the amino group) makes the meta product more favored. Hence, Statement II is correct.
Step 3: Conclusion.
Since Statement I is incorrect and Statement II is correct, the correct answer is option (C).
Final Answer: (C) Statement I is incorrect but Statement II is correct.