This basically happens when your website is targeting ASP.NET 4.0 and the application pool is set to run ASP.NET 2.0.
To do this follow the steps below:
Log-in into your hosting control panel.
Select “Websites” from Hosting Space Menu on the left side.
Click on your website to see website properties.
Select “Extensions” tab. Here you will set ASP.NET version to your desired one. I selected ASP.NET 4.0 in my case and everything is going fine now.
If the above solution fails, simply remove “targetFramework” and everything will go fine after your set website’s properties from Extension tab.
Reference: Muthukumar (http://nadarmuthukumar.blogspot.in), AjaxControlToolkit Loading Problem on Shared Hosting in ASP.Net