SatyajitDebnath if you are referring to icons as in Tag icon:
all this does is use the icon name as the class.
By default Flarum ships with FontAwesome icons only.
You can include another icon library, or build your own. Then use your custom icon class name as the icon value.
If you are referring to the image that becomes your extension icon:
It seems we accept all common images types. Is it not working? https://github.com/flarum/core/blob/d492579638fb52dafbfe65f1f36a95eb6047f7f3/src/Extension/Extension.php#L47
