Remember To prevent abuse for sending spam, many email servers require that the client be authenticated as a legitimate user before relaying mail (forwarding it to the recipient's email server). You have specified credentials in IIS; however, PHP does not make use of them.
Here are your options:
Instead of the mail() function, use one of the existing PHP mailer libraries that supports SMTP authentication (PEAR Mail, phpmailer, Swift Mailer, etc.).
Install and configure msmtp or one of the alternatives (here's how to make msmtp work with PHP). PHP will execute the program, which does support SMTP authentication, whenever it has to send a message if you set sendmail_path accordingly.
Change the mail server's configuration to allow relaying mail from the web server's IP address.