Part of play observed in audition (5)
I believe the answer is:
scene
'part of play' is the definition.
(scene in a play)
'observed in audition' is the wordplay.
'observed' becomes 'seen' (synonyms).
'in audition' indicates a 'sounds like' (homophone) clue (audition can mean hearing).
'seen' is a homophone of 'SCENE'.
(Other definitions for scene that I've seen before include "Where things happen" , "Landscape; part of act" , "Subdivision of a play/film" , "Picture" , "Part of a pantomime" .)