I did not report any income tax deductions. But for the second year in a row "Line 437 has a sum reported. Last year CRA disallowed this amount. Who is right?

Line 437, "Total income tax deducted" is usually calculated based on taxes deducted from income. This can usually be found in box 22 of income slips (T4, T4E, etc.). 

The amount can also come from RRSP withdrawal slips (T4RSP - box 30).