importrange() function can only read data from Google Sheets and therefore cannot read data from Microsoft Excel files, even though you can view and edit such files with Google Sheets. I do not think the official documentation mentions this limitation.
importrange() with your spreadsheet, you must convert it. To convert a Microsoft Excel, LibreOffice Calc or OpenOffice Calc file to a Google Sheet, open the file in Google Sheets and choose File > Save as Google Sheets. You can also use Google Drive to convert the spreadsheet to a Google Sheet, or open a new Google Sheet and choose File > Import to bring the data in. Then refer to the new file instead of the original in your
Alternatively, use File > Share > Publish to web > CSV and use
importdata() instead of
importrange() to bring the data to the target spreadsheet.