Exemption under section 10(26) available to an individual North East scheduled tribe whether available to a Partnership firm consisting of blood /close relations as partners?

Facts:

Assessee's were two partnership firms one formed by two uterine brothers and another firm by a husband and wife both being blood/close relations. The plea of the assessee firms was that since Section 10(26) used the word "any person" the exemption of Section 10(26) would also be available to a partnership firm as well especially one where the relationship is of blood/close in nature given the fact that in Khasi tribal community, the family is the unit or the person. Since a partnership does not have a separate existence apart from its partners as a creature of the law, the exemption of Section 10(26) would not only be available to them individually but also be available to the constituted firm of theirs as well. This was not acceptable to the CIT(A) and to the ITAT as such a reading would tantamount to double non-taxation both in the individual hands besides of the firm as well. Thus, the case went in appeal to the Meghalaya HC who remanded the case to ITAT to examine the fact whether the plea of the assessee's was correct as per the Khasi tribal community and on merits. On remanded appeal to a larger bench of ITAT - 

Held against the assessee that for the purposes of income tax a firm is separate and the partners are separate.  The reading of the community law or its customary law cannot be read into the income tax exemption of Section 10(26). Factually once a firm is properly constituted and registered the partners are entitled to sue the firm and the firm as well on the partners. Such facts under the partnership law were not considered by the assessee. Under LLP (Section 3) defines a LLP as a body corporate and no where in the partnership act it is mentioned thus. Nonetheless the taxation of LLP also dovetails that of a partnership firm under income tax law. So the exemption available to an individual cannot be extended to a firm as well just because the word "person" is used in Section 10(26).

Case: Hotel Centre Point v. ITO 2024 TaxPub(DT) 1442 (Gau-Trib)