The correct answer is option 3, which is "Both 1 and 2". Let`s analyze each statement to understand why it is correct:

Statement 1: The first session of the Indian National Congress was indeed held in Bombay in 1885. This statement is correct and aligns with the historical facts.

Statement 2: Surendranath Banerji`s absence from the first session of the Indian National Congress was due to the simultaneous session of the Indian National Conference. This statement is also correct and reflects the reason for his absence accurately.

Therefore, both statements 1 and 2 are correct, which means the correct answer is option 3. It is important to note that all the statements provided in the answer are correct.