Sendmail 5.7.1 Unable to relay

Issue

Want to send email to  xxx.xxx@example.com from RHEL system but the email is returned or not delivered 

MAIL From:user@localhost.localdomain
< 530 5.7.1 Client was not authenticated  
554 5.0.0 Service unavailable

Non-working Server:

>>> MAIL From:<root@your.relay.server.com> SIZE=217 AUTH=root@your.relay.server.com
250 2.1.0 Sender OK
>>> RCPT To:<user@your.domain.com>
>>> DATA
550 5.7.1 Unable to relay
503 5.5.2 Need rcpt command
>>> RSET
250 2.0.0 Resetting

Working Server:

>>> MAIL From:<root@your.relay.server.com> SIZE=217
250 2.1.0 Sender OK
>>> RCPT To:<user@your.domain.com>
>>> DATA
250 2.1.5 Recipient OK
354 Start mail input; end with <CRLF>.<CRLF>