I am not able to upload Avatar even after purchased permanent Avatar option?

These does seem to be an issue or filter in the game to not allow some images to be uploaded. I do not know if it is the file type, size or content that the game does not allow. I have had this problem myself. You can try cropping the image and saving it again before uploading. Or if possibly try from a different device.

If you still have trouble then suggest you report it to the game support and send them the image in case they can give you the correct reason for it not working.