Both! But depends what you are trying to say:

Above the mountains: could be used when something was directly above the mountains eg..dark clouds had formed above the mountains.

Over the mountains: could be used when you are discribing a place that is beyond the mountains eg. You have to travel over the mountains to find the hidden oasis.

Both could be correct depending on what you want to express, although ‘over’ would be normally more commonly used

Over the mountains