What ONTAP version is running on the controllers?
We support creating Hyper-V Luns from System Manager on Storage Controllers running version 7.3.x and 8.1 only
We do not support it on 7.2.3+ and 8.0.x releases due to non-API support
If you are running one of the supported versions of ONTAP, we might need to look into the logs to find out what the issue is.
Thanks,
Karthik