The problem was that the web.config file contained a tag named as :
This tag was supported in ASP.NET 1.0/1.1 only...
Read the solution here...
http://weblogs.asp.net/scottgu/archive/2006/12/10/gotcha-don-t-use-xhtmlconformance-mode-legacy-with-asp-net-ajax.aspx
At last the problem is solved...
Thanks,
Nitin Sharma
Software Engineer
.Net Technologies