Restart the system and see if it can update now.
If this does not fix the problem you could also try repairing the BITS service, by following the below article:
Download the .Net Framework removal tools "dotnetfx_cleanup_tool.zip" from the below link,
Run the tool & you should remove only that version for which you are receiving error code. (i.e. you should only remove .NET Framework 3.5 & its service packs package)
Then, restart your computer & manually install the following updates in order
1) Microsoft .NET Framework 3.5 package from the below link:
2) Microsoft .NET Framework 3.5 Service Pack 1 from the below link: