diff --git a/datasources/build.gradle b/datasources/build.gradle
index ef52db2305..6da0fdae34 100644
--- a/datasources/build.gradle
+++ b/datasources/build.gradle
@@ -29,6 +29,7 @@ dependencies {
     testImplementation group: 'org.mockito', name: 'mockito-core', version: '5.2.0'
     testImplementation group: 'org.mockito', name: 'mockito-junit-jupiter', version: '5.2.0'
     testImplementation 'org.junit.jupiter:junit-jupiter:5.6.2'
+    testImplementation group: 'org.opensearch.test', name: 'framework', version: "${opensearch_version}"
 }
 
 test {
@@ -37,6 +38,7 @@ test {
         events "passed", "skipped", "failed"
         exceptionFormat "full"
     }
+    systemProperty 'tests.security.manager', 'false'
 }
 
 jacocoTestReport {
diff --git a/datasources/src/main/java/org/opensearch/sql/datasources/exceptions/ErrorMessage.java b/datasources/src/main/java/org/opensearch/sql/datasources/exceptions/ErrorMessage.java
index 6dbd9bcfb5..c96640693c 100644
--- a/datasources/src/main/java/org/opensearch/sql/datasources/exceptions/ErrorMessage.java
+++ b/datasources/src/main/java/org/opensearch/sql/datasources/exceptions/ErrorMessage.java
@@ -7,6 +7,7 @@
 package org.opensearch.sql.datasources.exceptions;
 
 import com.google.gson.Gson;
+import com.google.gson.GsonBuilder;
 import com.google.gson.JsonObject;
 import lombok.Getter;
 import org.opensearch.rest.RestStatus;
@@ -65,7 +66,8 @@ public String toString() {
     JsonObject jsonObject = new JsonObject();
     jsonObject.addProperty("status", status);
     jsonObject.add("error", getErrorAsJson());
-    return new Gson().toJson(jsonObject);
+    Gson gson = new GsonBuilder().setPrettyPrinting().create();
+    return gson.toJson(jsonObject);
   }
 
   private JsonObject getErrorAsJson() {
diff --git a/datasources/src/main/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryAction.java b/datasources/src/main/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryAction.java
index c75170c355..95efd2e8f5 100644
--- a/datasources/src/main/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryAction.java
+++ b/datasources/src/main/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryAction.java
@@ -21,6 +21,7 @@
 import java.util.Locale;
 import org.apache.logging.log4j.LogManager;
 import org.apache.logging.log4j.Logger;
+import org.opensearch.OpenSearchException;
 import org.opensearch.action.ActionListener;
 import org.opensearch.client.node.NodeClient;
 import org.opensearch.rest.BaseRestHandler;
@@ -224,6 +225,9 @@ public void onFailure(Exception e) {
   private void handleException(Exception e, RestChannel restChannel) {
     if (e instanceof DataSourceNotFoundException) {
       reportError(restChannel, e, NOT_FOUND);
+    } else if (e instanceof OpenSearchException) {
+      OpenSearchException exception = (OpenSearchException) e;
+      reportError(restChannel, exception, exception.status());
     } else {
       LOG.error("Error happened during request handling", e);
       if (isClientError(e)) {
diff --git a/datasources/src/test/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryActionTest.java b/datasources/src/test/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryActionTest.java
new file mode 100644
index 0000000000..3333bf6792
--- /dev/null
+++ b/datasources/src/test/java/org/opensearch/sql/datasources/rest/RestDataSourceQueryActionTest.java
@@ -0,0 +1,102 @@
+/*
+ * Copyright OpenSearch Contributors
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+package org.opensearch.sql.datasources.rest;
+
+import static org.mockito.ArgumentMatchers.any;
+import static org.mockito.Mockito.doAnswer;
+import static org.mockito.Mockito.spy;
+import static org.mockito.Mockito.timeout;
+import static org.mockito.Mockito.verify;
+import static org.opensearch.sql.datasources.utils.Scheduler.SQL_WORKER_THREAD_POOL_NAME;
+
+import org.junit.jupiter.api.Assertions;
+import org.junit.jupiter.api.BeforeEach;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.api.extension.ExtendWith;
+import org.mockito.ArgumentCaptor;
+import org.mockito.Mock;
+import org.mockito.junit.jupiter.MockitoExtension;
+import org.opensearch.OpenSearchSecurityException;
+import org.opensearch.action.ActionListener;
+import org.opensearch.client.node.NodeClient;
+import org.opensearch.common.settings.Settings;
+import org.opensearch.core.xcontent.NamedXContentRegistry;
+import org.opensearch.rest.RestChannel;
+import org.opensearch.rest.RestRequest;
+import org.opensearch.rest.RestResponse;
+import org.opensearch.rest.RestStatus;
+import org.opensearch.sql.datasources.model.transport.CreateDataSourceActionResponse;
+import org.opensearch.test.OpenSearchTestCase;
+import org.opensearch.test.rest.FakeRestRequest;
+import org.opensearch.threadpool.FixedExecutorBuilder;
+import org.opensearch.threadpool.TestThreadPool;
+import org.opensearch.threadpool.ThreadPool;
+
+@ExtendWith(MockitoExtension.class)
+public class RestDataSourceQueryActionTest extends OpenSearchTestCase {
+  @Mock
+  private RestChannel channel;
+  private ThreadPool threadPool;
+  NodeClient client;
+
+  private RestDataSourceQueryAction restDataSourceQueryAction;
+
+  /**
+   * SetUp threadPool and NodeClient for all unit tests.
+   */
+  @BeforeEach
+  public void setup() {
+    restDataSourceQueryAction = new RestDataSourceQueryAction();
+    threadPool = new TestThreadPool(this.getClass().getName(),
+        new FixedExecutorBuilder(
+            Settings.EMPTY,
+            SQL_WORKER_THREAD_POOL_NAME,
+            1,
+            1000,
+            null));
+    client = spy(new NodeClient(Settings.EMPTY, threadPool));
+  }
+
+  @Override
+  public void tearDown() throws Exception {
+    super.tearDown();
+    threadPool.shutdown();
+    client.close();
+  }
+
+
+  @Test
+  public void testSecurityExceptionWithCreateDataSource() throws Exception {
+    doAnswer(invocation -> {
+      ActionListener<CreateDataSourceActionResponse> actionListener = invocation.getArgument(2);
+      actionListener.onFailure(
+          new OpenSearchSecurityException("No Permissions for datasource Creation",
+              RestStatus.FORBIDDEN));
+      return null;
+    }).when(client).execute(any(), any(), any());
+
+    RestRequest restRequest = new FakeRestRequest.Builder(NamedXContentRegistry.EMPTY).withMethod(
+        RestRequest.Method.GET).build();
+    restDataSourceQueryAction.handleRequest(restRequest, channel, client);
+    ArgumentCaptor<RestResponse> responseArgumentCaptor
+        = ArgumentCaptor.forClass(RestResponse.class);
+
+    verify(channel, timeout(1000).times(1))
+        .sendResponse(responseArgumentCaptor.capture());
+    RestResponse response = responseArgumentCaptor.getValue();
+    Assertions.assertEquals(RestStatus.FORBIDDEN, response.status());
+    Assertions.assertEquals("{\n"
+        + "  \"status\": 403,\n"
+        + "  \"error\": {\n"
+        + "    \"type\": \"OpenSearchSecurityException\",\n"
+        + "    \"reason\": \"There was internal problem at backend\",\n"
+        + "    \"details\": \"No Permissions for datasource Creation\"\n"
+        + "  }\n"
+        + "}", response.content().utf8ToString());
+  }
+
+
+}