I solved the problem by using by using two update panals, using trigger in one of the update panal.
<EditItemTemplate>
<asp:UpdatePanel ID="UpdatePanel1" runat="server">
<ContentTemplate>
ID:
<asp:Label ID="IDLabel1" runat="server" Text='<%# Eval("ID") %>' />
<br />
Name:
<asp:TextBox ID="NameTextBox" runat="server" Text='<%# Bind("Name") %>' />
<br />
<asp:DropDownList ID="ddlLName"
runat="server" ValidationGroup="VG1" SelectedValue='<%# Bind("LNAMEIFYES") %>' OnSelectedIndexChanged="ddlLName_SelectedIndexChanged" AutoPostBack="True">
<asp:ListItem Value="">Please select...</asp:ListItem>
<asp:ListItem Value="1">Yes</asp:ListItem>
<asp:ListItem Value="2">No</asp:ListItem>
</asp:DropDownList>
<br />
<asp:Panel ID="pnlLNAme" runat="server" Visible="false">
LName:
<asp:TextBox ID="LNameTextBox" runat="server" Text='<%# Bind("LName") %>' />
<br />
</asp:Panel>
</ContentTemplate>
</asp:UpdatePanel>
<asp:UpdatePanel ID="UpdatePanel2" runat="server">
<ContentTemplate>
Salary:
<asp:TextBox ID="SalaryTextBox" runat="server" Text='<%# Bind("Salary") %>' />
<br />
IsActive:
<asp:CheckBox ID="IsActiveCheckBox" runat="server" Checked='<%# Bind("IsActive") %>' />
<br />
<asp:LinkButton ID="UpdateButton" runat="server" CausesValidation="True" CommandName="Update" Text="Update" />
<asp:LinkButton ID="UpdateCancelButton" runat="server" CausesValidation="False" CommandName="Cancel" Text="Cancel" />
</ContentTemplate>
<Triggers>
<asp:AsyncPostBackTrigger ControlID="UpdateButton" EventName="Click_Enent" />
</Triggers>
</asp:UpdatePanel>
</EditItemTemplate>