Hi Sanil,
According to your description, when receiving an report with MHTML format via e-mail, the report is not displayed in outlook properly, right?
In our local environment, we have tested this scenario and the report has the same issue. Per my research, it is because outlook will call the previewer plugin to display the MHTML content. And this viewer is different the MHTML viewer which used in IE browser. In the e-mail, we can see the following image, it suggest that if there are some displayed problems, we can view it in a browser.
This forum is about designing Reporting Services report, as your issue is about MHTML content displayed in outlook, we suggest you post this case to the Outlook forum for dedicated support:
https://social.technet.microsoft.com/Forums/office/en-US/home?forum=outlook
If you have any other question, please feel free to ask.
Regards,
Shrek Li