Can anyone tell me what may be wrong
We will need a lot more information to be able to help you. Schematics so we can see how you have things wired up. We will need to see a sigma studio project, if you have one, and then the register settings you are using.
We also need to know details about your system. Are you getting signals from any other input to the 1701? So give us more detail and we will be able to help.
Dave's comment of "does it work with other input sources?" is key. The ADAU1701 does not have a microphone preamp, so if for example you're using the -1701 eval board or a similar circuit, there's simply not enough gain to hear anything. For a test, you could try adding a lot of gain in your signal flow, as shown below (I also recommend a DC Block filter when using large input gains). Although the resulting S/N ratio will be poor, this test will tell you if all you need is a preamp to make it all work.
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