Hi Laxmi,
I think, the gap was that you were testing on prompt that is coming from Bex variable, I was trying on a prompt that is created at report query panel with objects from Bex query. Are you not able to sort LOV any of the Bex variable prompts?
Try and test if you are able to sort LOV when you create webi query level mandatory prompt on company code.
One more observation is that you are using a variable of type selection option, any reason for choosing selection option over multiple single values variable, I have seen issues around using selection option in older versions.
Thanks
Mallik