Why do we call cell as the smallest unit of life as
atoms are more smaller than this and they contain many other smaller particles?
Cells are called ‘structural’ and ‘functional’ units for a reason. Yes, cells are made of molecules which are in turn made up of atoms. What we mean by “Cell is the unit of LIFE” is that a cell is the smallest living entity in a living system. If you break down a cell into its molecules - it becomes chemistry and if you further break it down into atoms - it becomes nuclear/atomic physics.
Biology started with the cell and once you split or break a cell down, it cannot provide structure nor function to the living being it belongs to or to itself if unicellular.
Hence the smallest ‘living’ unit in the world is a cell. Atoms and molecules are not by definition ‘living’