Does IEEE accept a previously rejected paper for peer review? A few months before, I have submitted a manuscript to an IEEE journal. But, unfortunately, it has been desk-rejected (because the manuscript is written like a report). The editor has mentioned in an email not to submit this manuscript again in the same journal.

However, I am planning to submit it again in the same IEEE journal because, I have made so much modifications and believe that this time the manuscript is up to the mark.

I have mentioned the above issue in the cover letter.

Is this a good idea? I mean does IEEE accept a previously rejected paper for publication? Because, the editor has explicitly stated not to submit the manuscript again. Does the editor consider the fact that we have modified the manuscript a lot?
If it has sufficient changes and answers the concerns of the editor you will probably get a new hearing. 

However, if you think of it as the same manuscript then perhaps you haven't made sufficient changes that it will be considers as new, rather than a resubmission. 

However, if you have done the necessary work, I think your note accompanying the manuscript (NEW manuscript) should be sufficient. It is a courtesy to them so that they can be reminded of the history. 

And of course, make sure it doesn't read like a "report". You may be able to get some local advice on that.