When you run SSRS report in Visual Studio you may not come across this error but when you deploy to report server even though you give right permission and select correct data source your report is still giving above error message. If you get this error first check DB level permission.
in my example I have used a stored procedure in the report. I can run the report without any error in Visual Studio but when I deployed to the server I first could not figure out why this error was throwing. The I checked the DB level permission for the SSRS user. I noticed that I haven't given Execute permission to execute the stored procedure.
When you run the report in Visual Studio it uses permission for localhost but when you run it in report server you need to allocate the required permission to select, execute queries in that database.
Hope this helps. Happy reporting time!
