Since the question is vague and general, without specifying which dimension of the concept of imamate the occultation of Imam Mahdi (aj) contradicts, we will have to list some of the imam's major responsibilities and see if there actually is any contradiction or not.
Imamate, which is the continuation of prophethood, only differs with it in there being no receiving of revelation in imamate. Therefore, the imam shares all of the responsibilities the prophet has, namely:
1- Taking measures in establishing an Islamic government and freeing the people from the oppression and illegitimate rule of tyrants. The leader of a nation can't be expected to rise and try to take over no matter what the political circumstances of his time are. It defeats the whole purpose. That is why we see the prophet of Islam (pbuh) doing the same before his migration to Medinah; he would try to conceal things because of the circumstances he was living in. This in no way flaws his prophethood; it only signifies the hard circumstances of that time. The same goes with our time which is the time of the occultation of our imam; complicated and extenuating circumstances don’t allow him to rise. So questioning why he doesn’t isn’t very logical. On the other hand, he is mostly known for his rise and universal rule, so his occultation is in no way in conflict with the first responsibility and signifies that the people and Muslims still aren’t ready for his emergence.
2- Explaining Islamic teachings and guiding the people. This is the second responsibility of the imam which is sometimes done by him directly and sometimes indirectly, just as the prophet of Islam (pbuh) would send others for the guidance of the people who were qualified for the job. This is also what the twelfth imam (aj) did and has done during the minor and major occultation; he assigned and has assigned “specific” and “general” representatives for the people to refer to regarding different issues. These were some of the responsibilities of the imam in which his occultation has no conflict with. There are also other benefits that the imam’s existence entails that have nothing to do with his responsibility and it is only because of the grace and love of Allah (swt) that we make use of these benefits, namely:
The imam is the “heart” and “soul” of this world; there are hadith that say if there was to be no imam in the world, the earth would swallow its inhabitants.
The imam is the intermediate link and mediator between Allah’s (swt) grace and mercy and us; if anything wants to reach us from Allah (swt), it is through and because of him. His prayers are all accepted and answered and all of his intentions are good. This matter has been pointed to in the ziyarahs of our imams.
We the children of Adam (pbuh) have sworn enemies who are led by Iblis (Shaytan). But at the same time, the imam indirectly saves many of us from falling into their traps and guides us through the spiritual effects he has on us (that we might not be aware of). These are only a few of the many benefits of an “absent” imam, who as the prophet (pbuh) said, is like the sun behind the clouds; it isn't seen, yet it benefits all.
This question is a bit vague and unspecific and the person asking hasn’t made clear which part of the concept of imamate is undermined by the occultation of the twelfth imam. Therefore, we need to mention the different responsibilities of the imam and see if any of them aren’t fulfilled as a result of his occultation.
Imamate is the continuation of prophethood[1] and the imam is one who possesses all of the attributes of the prophet, albeit receiving divine revelation from its sources. So the imam has three major responsibilities, as does the prophet[2]:
1- Taking measures for establishing an Islamic government and freeing the people of oppressive ones
2- Spreading divine teachings amongst the people
3- Guiding the people to the straight path
The three abovementioned are the most important of their responsibilities. Nevertheless, if certain social circumstances or the weakness of the Muslims don’t allow the imam to fulfill his mutual responsibilities that depend on the cooperation of others, it isn’t his fault and he is not the one to be held responsible. Clearly, this is in no way in conflict with the concept of imamate.
Issues such as revolting and rising against illegitimate and oppressive governments, and establishing other ones are collective movements that demand the help of everyone and the appropriate circumstances. Saying that it is the responsibility of the imam to rise and take over, regardless of what the circumstances are, is totally baseless, because as we all know, before his migration to Medinah, even the prophet of Islam (pbuh) wouldn’t openly practice Islam as a result of the social and political circumstances then, let alone rise against the rulers and try to establish a government! Yet no one accuses the prophet of fear, weakness and not fulfilling his duties. His silence only signifies the circumstances of his day.
Now, this matter doesn’t only belong to the prophet (pbuh), the imams had similar situations. Other than the first imam (and that being towards the end of his lifetime), the other imams didn’t succeed in establishing a government, yet no one believes that these were shortcomings by them and no one questions the concept of imamate as a result.
The major occultation of the final imam is no exception; whenever the right circumstances for an Islamic government come up, that will be the end of the occultation, so one can conclude that those circumstances are still to come and haven’t come yet. The twelfth imam is known for his universal rule and establishing a just government[3], one that reminds everyone of Allah's (swt) justice, so his occultation can't be in conflict with one of the main purposes of imamate, which is the establishment of a true Islamic government.
As for the second reason for the concept of imamate:
Since it wasn’t possible for the prophet of Islam (pbuh) to travel everywhere and make contact with all tribes and people in person, he would send others as representatives, who knew the Quran by heart and were familiar with Islamic teachings to different places[4] to do the job. This is a logical method adopted by the prophet for the spread of Islamic teachings.
This method was also adopted by the twelfth imam during his minor occultation. By appointing "specific" representatives, the scientific and religious needs of the laity then were met. This method went on to be used in the major occultation as well, with one small change; instead of "specific" representatives, "general" representatives were to be referred to for the abovementioned issues.[5]
It doesn’t stop there either, sometimes when even the "general" representatives aren’t able to find the answers to some Islamic problems, the imam himself solves them using different ways for conveying the answer to the Muslim nation. This matter can be learned of by taking a look at the theory of "Ijma' Dukhuli"[6], or just by reading books on the stories of those who have seen his Excellency.
How the occultation isn’t in conflict with the concept of imamate regarding the third responsibility of the imam is similar to how it isn’t with the second, so there is no need for repetition.
What needs to be said here are two points:
1- When we say that the imam isn’t present, we don’t mean that his body isn’t present, because we all know that he is an individual of society, living a normal life just like the rest of us. The only difference is that his life has been prolonged, and there is nothing unnatural about that and no rules of nature are broken as a result. So when we say he isn’t present, we mean that the combination of him and his status aren’t present, and in other words, him being the imam and leader of all the people of the world as he will be after his rise and establishment of a universal government isn’t present for now.
2- The reasons that back the concept of imamate which were mentioned above were the ones that are purely the responsibility of the imam, yet there are other reasons that we have an imam which have to do with the grace and mercy of Allah (swt) upon us, namely:
a) The heart of this world: According to the prophet of Islam's (pbuh) sayings, the imam is the "heart" and "soul" of this world.[7] There are hadiths that say: "If the world was to ever lack an imam, it would indeed swallow all of its inhabitants."[8]
b) The imam is the mediator of the mercy and grace of Allah (swt) to the people, meaning that Allah's (swt) grace flows through him to us. It is on this basis that it has been said in hadiths and ziyarahs that: "It is because of you [the imams] that the sky showers its rain upon us, that the trees spring from the ground and that they bear fruit…"[9]
c) Having an influence on individuals[10] and preventing the misguidance of the people. The same type of influence and positive effect can be found in Islamic occasions like Muharram and Ramadhan all over the world; at these times Muslims commit less sins and have more spirituality. The same goes with the final imam (aj);l when they know that he is alive and present amongst us, many people show less tendency to commit sins, usually out of love for him.
All that was mentioned was only some of the many benefits there are in having an "absent" imam, who as the prophet (pbuh) said, is like the sun behind the clouds[11]; it is there and is doing its job, and all are benefiting from it, yet cannot be seen.
Of course, this saying of the prophet (pbuh) encompasses many points that you can read about[12] in detailed books.[13]
[1] Muhammad Taqi Misbah Yazdi, Amuzeshe Aqaid, pg. 306.
[2] Mohammad Husein Tabatabai, Shia dar Islam, pg.176.
[3] Muhammad ibn Jarir, Dala'ilul-Imamah, pg. 240.
[4] Jafar Subhani, Farazha'i az Tarikhe Payambare Islam, pg.307.
[5] Sheikh Hurr Ameli, Wasa'ilul-Shia, vol.18, pg.101.
[6] Muhammad Ridha Mudhaffar, Usulul-Fiqh, pg.358.
[7] Mahdi Pishva'i, Sireye Pishvayan, pg. 719.
[8] Kuleini, Usul Kafi, vol.1, pg.179.
[9] Ibn Quluweih Qummi, Kamiliul-Ziyarat, second ziyarah.
[10] Seyyid Muhsin Kharrazi, Bidayatul-Ma'arifil-Ilahiyyah, vol.2, pg. 153.
[11] Muhammad Baqir Majlisi, Biharul-Anwar, vol. 52, pg. 93.
[12] Seyyid Muhammad Kadhim Qazwini, Emam Mahdi az Veladat ta Zuhur.
[13] For further information, see indexes: Imam Mahdi (aj) from a Shia perspective, question 168; The benefits of Imam Mahdi (aj) during his occultation, question 654; The reason for Imam Mahdi's (aj) prolonged life, question 221.