Hi Arun,
Issuing Form 16 is necesary for all the employees even if it is not mandatory from Income Tax act point of view.
Most of the employees would come back to you asking for Form 16 for past 2-3 years especially when they apply for any loan in the bank.
also it would be a good will gesture to you employees as they will be assured company is following all statutory compliances of under Income tax.
Hope this helps
Regards