Thanks for the answers. I checked the Nuts&Volts article, it actually uses 9V battery before 7805. I am using 3xAA, which puts 7805 out of picture.
I tried it with 2 diodes, what capacitor values & what types should I use to minimise current consumption as well and where should I place them to avoid resetting. I will check it on my breadboard before making my PCB and setting it there.
Currently it is still resetting, I tried it with few random capacitor values but no success.

Currently on my breadboard, one 4007 is attached to 5V line from 7805, and one from 4.5V battery set.