Can the PIO be punished for wrongly rejecting my RTI?

Yes. Under Section 20, if the Information Commission finds the PIO refused without reasonable cause, gave wrong information, or denied the request malafidely, it can impose a penalty of Rs 250 per day of delay, up to a maximum of Rs 25,000, recovered from the PIO's own salary. Asking for this penalty in your Second Appeal often gets stuck information released.