It is an issue to connect to your smtp server.
Mybe it requires authenticated connection or access through SSL ou TLS (then port should not be 25)
Check with your smtp provider

Below test page works well:-

<?php
         $to = "rakesh1084@gmail.com";
         $subject = "This is subject";         
         $message = "This is HTML message.";
         $message .= "
This is headline.
";
         $header = "From:rakesh1084@gmail.com rn";
         $header .= "Cc:rakesh1084@gmail.com rn";
         $header .= "MIME-Version: 1.0rn";
         $header .= "Content-type: text/htmlrn";         
         $retval = mail ($to,$subject,$message,$header);
    
         if( $retval == true ) {
            echo "Message sent successfully...";
         }else {
            echo "Message could not be sent...";
         }
      ?>

Note: since php.ini is configured with smtp is configured above code is working.

Can you help:-

I this works, just set smtp server to localhost.

Tried as per your suggestions:-
Changed to localhost

2017-01-19 21:12:27.980 ** ERROR ** ERROR **
2017-01-19 21:12:27.983 ** ERROR ** on file 'C:inetpubwwwrootprojeqtorexternalPHPMailerclass.smtp.php' at line (286)
2017-01-19 21:12:27.986 ** ERROR ** cause = stream_socket_client(): unable to connect to localhost:25 (No connection could be made because the target machine actively refused it.
)
2017-01-19 21:12:27.988 ** ERROR ** Error sending mail
2017-01-19 21:12:27.991 ** ERROR **    SMTP Server : localhost
2017-01-19 21:12:27.993 ** ERROR **    SMTP Port : 25
2017-01-19 21:12:27.996 ** ERROR **    Mail stored in Database : #93
2017-01-19 21:12:27.998 ** ERROR **    PHPMail error : SMTP connect() failed.  https://github.com/PHPMailer/PHPMailer/wiki/Troubleshooting 
2017-01-19 21:12:28.000 ** ERROR *****    PHPMail debug : 

Additional Information:-
have mantisBT also setup in place.

$g_phpMailer_method = PHPMAILER_METHOD_SMTP;
$g_smtp_host = 'sm02.org.com';
$g_smtp_port = 25;
$g_smtp_username = 'userid';
$g_smtp_password = 'secret';
$g_enable_email_notification='ON';

it is working.

have kanboard also in place where emails are working:-

// Mail transport available: "smtp", "sendmail", "mail" (PHP mail function), "postmark", "mailgun", "sendgrid"
define('MAIL_TRANSPORT', 'smtp');
// SMTP configuration to use when the "smtp" transport is chosen
define('MAIL_SMTP_HOSTNAME', 'sm02.org.com');
define('MAIL_SMTP_PORT', 25);
define('MAIL_SMTP_USERNAME', 'userid');
define('MAIL_SMTP_PASSWORD', 'secret);
define('MAIL_SMTP_ENCRYPTION', null); // Valid values are "null", "ssl" or "tls"

What could be the reason..?

All should work fine with same parameters as for Mantis.
But we use phpMailer and I think that for authenticated connection (when user/password is provided) it automatically switched to secured connection (ssl I guess) to avoid to transfer login data unencrypted.

Possibly you can try to define

$paramMailerType='mail';

in your file parameters.php.
This will switch to standard php mail feature (less secured)

Worked well.
Thanks for the same.

Suggestion:- Can this be a configuration via Global Parameters itself.

Request recorded as Ticket #2513