Deploy command not working

[gopida]

command theme deploy throws "this file is not part of your theme" error

[development] Warning, this is the live theme on xyz-dev.
[development] 2|2 [==============================================================================]  100 %
[development] 2 files, Updated: 1, No Change: 1, Errored: 1
	[development] Errors encountered: 
	[development] (sections/xyz.liquid) this file is not part of your theme
finished command with errors

Steps to reproduce the behavior:

1. run command 'theme new --password=mypassword --store=store.myshopify.com --name=theme'
2. run command 'theme download layout/theme.liquid'
3. create a sections folder in the same dir
4. Create a new liquid file(xyz.liquid) under sections
5. run command 'theme deploy layout/theme.liquid sections/xyz.liquid'

Expected behavior
sections/xyz.liquid should be uploaded

Environment:

• OS [e.g. iOS]: mac & linux
• Themekit version (run theme version to check): 1.3.1 (tried out previous versions as well)
• Editor [e.g. atom, sublime]: sublime
• Ignore:

Additional context
This has been working until feb 21 noon.