Make sure that you are using the correct tool path (i.e. installutil.exe) for installing the application. This issue normally occurs when we attempt to use 32 bit (/platform:x86) version of the tool to install a 64 bit application or a 64 bit (/platform:x64) version of the tool to install 32 bit application.
Just confirm the path you are using is correct. There is a slight difference in both paths.
C:\Windows\Microsoft.NET\Framework\v2.0.50727\
or
C:\Windows\Microsoft.NET\Framework64\v2.0.50727\