Hi @Kunwar Yuvraj Singh ,
Based on your description, I tried testing in my lab tenant but cannot reproduce the issue. In case it's a temporary backend issue, could you try it again now and see the result?
Are you able to complete the settings if choosing another rule condition?
Noticed that you are using the InPrivate mode, any difference if opening the browser in normal mode?
Besides, please try creating the rule using Exchange Online Powershell and check how it goes:
New-TransportRule "New Rule" -From "user1" -SentToScope NotInOrganization -RejectMessageReasonText "Messages sent outside are strictly prohibited."
If the answer is helpful, please click "Accept Answer" and kindly upvote it. If you have extra questions about this answer, please click "Comment".
Note: Please follow the steps in our documentation to enable e-mail notifications if you want to receive the related email notification for this thread.