That is very strange indeed... So not even your starter Pokemon advances from level 5 no matter how many battles you do?
Is the game definitely a legit copy? As in, when you bought it did you get it from a trusted source? Gamestop etc.? Was it preowned or new?
Are you sure you're not gaining experience? Is it possible you could just be gaining very little and the bar hardly moves? Are you maybe gaining it and for some reason the bar doesn't appear to fill/the sound when the bar fills isn't playing? This would still be weird, but at least it would partially solve your problem.
Do you have any way to completely wipe your .sav file from your cartridge? I'm not very familiar with 3ds stuff but I believe twlsavetool can do this. By erasing your save completely, you are essentially performing a factory reset on the cartridge, restoring it to how it was when your first played it. Resetting the data from within the game doesn't do this, it wipes your save, but doesn't completely erase everything else.
Let me know if you fix this, as if it is a legit cartridge, I am also interested in knowing what's going on (as you can probably tell from my multitude of questions).