For us it was happening on CRM online 2011, the same error. However in our case the user (or the security role) did not have permission to one of the entities that the report was trying to pull.
sunil,
how where you able to figure out what entity the report was trying to pull?
i’m having a similar issue, if i give the user sys admin role the report works fine… can’t figure out what entity it’s trying to pul for me to adjust the permissions
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