Create a relay for the smtp.office365.com as XXXXX-com-au.mail.protection.outlook.com <where XXXXX represents the company domain>.
Specify the office365 office user credentials and authenticate to login to the relay host.
Then under Clarity CSA:
Hostname : Provide the SMTP relay host created.
Default Sender Email Address : Define the same email used to authenticate against the relay host.
Use Authentication: Uncheck
Save the CSA configuration and restart CA PPM Services to validate email notifications are being sent.
Additional Information
Note: Make sure the CA PPM Application server public facing IP Address is registered in the SPVF list; else the emails ends up in spam/junk folder. https://mxtoolbox.com/SuperTool.aspx?