In a piston cylinder arrangement, the piston can be extended only if the pressure of the gas inside is higher than the atmospheric pressure.In case of isothermal expansion of ideal gas, initially the piston is at rest(gas pressure is equal to the atmospheric pressure) and as energy is given to the system the piston moves.Doesnt this mean the pressure of the gas increases above the outside pressure?
It is indeed quite correct that the pressure inside the cylinder increases above that of atmospheric conditions. However, the gradient of pressure (the pressure difference) is infinitesimally small. When we talk about isothermal conditions, we mean that the system is undergoing a thermodynamic process EXTREMELY SLOWLY, such that the system maintains a constant temperature relative to the surroundings. So, a pressure difference is inevitable, and that is precisely the factor that makes the piston move. If there were no pressure difference and if the process were isothermal, then two of the parameters governing a system, namely, the pressure and temperature, would be constant, thus making the third parameter—the volume—a constant as well.
The only reason we cannot perceive this infinitesimally small change in pressure is that no process is actually reversible and isothermal, as it would take an infinitely long period of time to undergo such process.
Also, I must add that for an ideal gas undergoing an isothermal process, Boyle's Law is applicable, which states that P×V = constant, and not just that P = constant. So, as the pressure increases infinitesimally, the piston moves outward, thus increasing the volume. Here, two counteracting processes are occurring one after another. This process continues as long as energy is supplied to the system.