Hi Again,
I solved the issue,
The problem was that when yocto unpacks the source files it unpacks it not in tmp/work/.../python3-wirepas-messaging/python3-wirepas-messaging-1.0 which is the work directory, so that is why setuptools cannot find setup.py ,
So I modified the source files folder to the same recipes name with ${PV} so it can match the same recipe's workdir. And now files are extracted in the good location and get compiled correctly.
devtool uses externalsrc to locate the source files directly, that is why it finds setup.py.
Thanks for the support again, Talel