I powered the circuit up and smoke came out of the Transistor and 555.
Thats because too much current is used in your circuit.
I have drawn two lines on your circuit. The light red line shows one path the current goes, and literally treats your speaker as an 8-ohm resistor, which then forces the collector to be on.
The dark red line is a problem, because you haven't found out what is INSIDE the 555 timer. and if the output pin of the 555 timer is connected to an internal resistor of say 1K and connected to VCC, then I can perfectly see why the transistor can blow up.
....which then gives off a audible and visual Alarm (red led)
It gives off smoke at the moment. You seem to have the timer wired up in the one-shot mode, and there is nothing in your circuit that shows an oscillator. Look up more on 555 timers, and with some adjustments, you can wire one up as an oscillator (multivibrator).
Try replacing your problem areas with my version (see next attachment).
All my version does is activate the relay when the button is pressed.
the x ohm resistor can be any value. I don't know the maximum current your relay can handle. so find that out, and use ohms law to determine the value for the x ohm resistor.
Notice how I isolated the two stages with a coupling capacitor? This prevents any internal resistors in the 555 from damaging the circuit, while allowing the signal to go through.
Is there something wrong with the circuit.
I have explained that above.