You need to add extension in your code after downloadFileName at 3rd line.
var downloadFileName = string.Format(projectno, DateTime.Now.ToString("yyyy-MM-dd-HH_mm_ss"));
Response.ContentType = "application/zip";
Response.AddHeader("Content-Disposition", "filename=" + downloadFileName + ".zip");
using (var zip = new ZipFile())
{
var readMeMessage = string.Format("Your ZIP file {0} contains the following files:{1}{1}", downloadFileName, Environment.NewLine);
foreach (GridViewRow gvr in grdUploads.Rows)
if (((CheckBox)gvr.Cells[6].FindControl("dwnldCheck")).Checked == true)
{
string filename = Server.MapPath("../" + ((Label)gvr.Cells[3].FindControl("lblTitle")).Text);
readMeMessage += string.Concat("\t* ", filename, Environment.NewLine);
zip.AddFile(filename, projectno);
}
zip.AddEntry("README.txt", readMeMessage, Encoding.ASCII);
zip.Save(Response.OutputStream);
}