Dr Who TV canon never bothered much with continuity anyway.
They destroyed Atlantis at least three times, in different ways.
Now that's technically BS. It only happened twice.
The first time we see Atlantis is in
The Underwater Menace, which is set in the 70s. Those were the ruins of Atlantis society, in caves deep beneath an island. They get flooded again at the end, but that has nothing to do with the original destruction.
The next time Atlantis is brought up is in
The Daemons, where Azal, when telling the Master not to fail him, says, "
Remember Atlantis!", implying that the Daemons had a hand in its destruction, but only
implying.
The last time Atlantis appears is a year later in
The Time Monster, with its destruction in ancient times actually shown to be caused by Kronos the Chronovore, albeit unleashed by the Master's machinations.
The spin-off novels, while of dubious canonicity, claim that the Daemons were the ones to give Atlantis the crystal that held Kronos' power. I think this was in
The Quantum Archangel.