Apple TV 4K 3rd gen does not recognize ARC audio connection from TV

I just purchased Apple Tv 4k latest 3rd gen. Downloaded Netflix which prompted to update the Apple TVOS which I did. It updated to the latest TVOS ver 16.3.2.

I have Sonos soundbar which is connected to the TV HDMI ARC port. The Apple TV connected to the TV HDMI port.

The Audio Output menu list on the Apple TV option DOES NOT show the ARC (Audio Return Channel), instead only has Default Audio Output = set to "TV Speakers" and has Temporary Audio Output = set to nothing.

I don't see ARC listed.

Appreciate any advice on how to get the ARC activated on the Apple TV in the audio output menu list.