Present tense "We are forbidden to sleep by them" should also be acceptable.
We were deprived of sleep by them is a better interpretation!
How can one forbid sleep?
Perhaps they are building soccer stadiums in Qatar, or are they students in a class ^^
They did not permit us to sleep was not accepted
That is because event though it has a similar meaning, it is rearranged in a way that makes it not a passive sentence