Explanation:

 x The Indian National Congress was founded at its first session held in Bombay in 1885. W.C. Banerjee was its first president. The early Congress leadership known as Moderates had total faith in the British sense of justice and fair play. The Moderates used petitions, resolutions, meetings, leaflets and pamphlets, memorandum and delegations to present their demands. x In the beginning, the British Government welcomed the birth of the Indian National Congress. In 1886, Governor General Lord Dufferin gave a tea garden party for the Congress members in Calcutta. The government officials had also attended Congress sessions. With the increase in Congress demands, the government became unfriendly and consequently during the later years government officials were prohibited from attending the sessions of the INC. Hence, statement 1 is not correct. x The Moderate leadership did believe in social reforms and many moderate leaders actively sought to reform society. For instance, some Moderates like Ranade and Gokhale protested against child marriage and widowhood. However, the moderates did not advocate Social reforms officially from the forum of the Indian National Congress. The reforms were left to different classes and caste organizations. x M.G. Ranade and Raghunath Rao founded Indian Social Conference for social reforms. It met annually from its first session in Madras in 1887 at the same time and venue as the Indian National Congress. It focused attention on the social issues of importance; it could be called the social reform cell of the Indian National Congress. Hence, statement 2 is not correct. x The major demands of the Congress during its early phase were: Expansion and reform of legislative councils, Greater opportunities for Indians in higher posts by holding the ICS examination simultaneously in England and in India, Separation of the judiciary from the executive, Reduction of land revenue and protection of peasants from unjust landlords, Abolition of salt tax and sugar duty, Reduction of spending on army, Freedom of speech and expression and freedom to form associations. Hence, statement 3 is correct.