I will post my reply from the support ticket that you opened on the same question in case any other community member experiencing the same issue.
"XML schema http://schemas.telerik.com/reporting/2017/3.0 was introduced with version 18.104.22.1683 which is older than version 22.214.171.1245. The error message "Cannot read a document with the specified schema: http://schemas.telerik.com/reporting/2017/3.0." indicates that the project that renders reports references the version of Telerik Reporting older than 126.96.36.1993 where the specified schema was not supported.
Please make sure that the project that hosts the Reporting REST service is using the version that supports the required XML versioning. I recommend running the Upgrade Wizard in Visual Studio for easier upgrading to the required version. In case the issue persists, please send us the following information so we can review the additional details about your setup and provide you further suggestions:
1. Bin folder and the configuration file of the project that hosts the Reporting REST service so we can check the version of Telerik Reporting assemblies.
2. The log with captured HTTP requests made during the time the problematic report is opened int the viewer.
3. The definitions of the master report and subreports so we can check the XML versioning."
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