Anurag,
Thoughts:
* Consider: Is there any chance your SIM card is bad. As a test, try removing SIM card, and see if Storage Sense works properly.
* Power down your phone, then remove battery, sim card, and memory card. And then reinstall them to assure that all are seated properly.
* Try doing a reset. Three kinds/levels of reset can be perform. AT&T online help describes Reset this way:
"Reset: Perform a soft, factory, and alternate master reset of the device."
I would start with the least destructive and work my way up. You might want to backup your device before you start.
AT&T provides a nice video showing how to perform each type/level of reset. They also provide a nice interactive tutorial on this.
To view the video and tutorial, go to
Cell Phone & Tablet Support - AT&T How-To Center and then search for reset.
While this instruction is provided by AT&T, I suspect it applies to all Lumia 640 XL devices.
If after trying the above, if the problem persists, it is probably time to see if you can return/exchange the device with the place you purchased it, or with Microsoft if it is warrantied by them. I purchased my phone from Microsoft Store (USA) online and they have a 30 day return policy.
Good luck. And please keep us posted on how it's going.
Lilla