prakrityaiva ca karmani
kriyamanani sarvasah
yah pasyati tathatmanam
akartaram sa pasyati

"One who can see that all activities are performed by the body, which is created of material nature, and sees that the self does nothing, actually sees."

In this sloka also the Lord describes how one has to distinguish atman from body. We do many actions, like eating, walking or sleeping. If we do actions permited by shastras, we get punya. That is by performing an yagna allowed by shastras, we get punya. By injuring another and not conforming to shastras we acquire papa. Every action we do, is with the conscience that we are doing. But are we doing? Here the word 'we' or 'I' indicates atman and atman by itself can not do yagna nor injure others. So if atman acts means it is with association of a body. Without a body atman can never act. So in this sloka the Lord derives the point that for all the actions [kriya in Sanskrit] atman is not responsible. So atman has to be understood as akartha or non-performer [of actions]. But atman in a body does actions because of past Karma. Atman by itself never does anything. Past Karma is stuck to atman. We do not know when those Karma have stuck to atman. It is there without a beginning and Karma ia always associated with atman. This Karma makes atman to be born with a body. Because of association with a body, it acts appropriate to that body. Atman, by itself does not perform any actions. We have seen the natural characteristic of atman is when it is liberated or a muktatman is in its natural state. Actions arise because of association with body. Why should atman be associated with a body? Because of effects of past Karma, done in infinite births. This Karma accumulated over infinite births, is being expended in every birth, by performing actions appropriate to the body in which atman resides in that birth! This truth that atman by itself is akartha or non-performer is to be understood. This is another difference between atman and body, explained by the Lord. Body is meant for performing actions. Atman is non-performer. Prakritiyaiva = by prakruti [related body] alone, sarvasa karmani = all actions [like eating, walking, seeing,etc], kriyamanani = are being performed. Body is made of prakruti and it does all the actions. Can body by itself perform? No. Only when an atman is inside the body, body performs actions. Atman with the past Karma indulges in actions through the body. As long as past Karma is there, atman will reside in one body or the other. A Karma-less atman does not need a body made of prakruti. So instead of saying he does, we should say he [representing an atman] does, because of past Karma, by being inside a body! By saying we do or did it, all the results of the action will stick to atman. The papa/punya of every action, we claim to have done, will also be ours, that is, they will stick to atman. Therefore, we should slowly understand that since actions' results stick to atman, we should refrain from doing actions. If one thinks himself to be a Deva, he wants to enjoy the company of damsels like Rambha, Oorvasi, Menaka, etc. But the same one, if he thinks himself to be an atman and not a Deva, then atman never will want the company of these women, nor atman would want to do anything. If atman in a lion's body thinks it is lion, it starts running after deer to eat. Atman in a human body, thinks it is a man [or woman] and runs after earning. All these actions, like desiring company of women or running after a prey or struggling to earn, occured because atman thought it was Deva or lion or human being. Atman in lion's body does not think of doing human's actions. Nor vice-versa! If this thought that atman and the body it is residing are same, is discarded, then atman will not perform actions. Yah pasyati = [like this] when sees, tatha = in that way, atmanam = atman or soul as, akartaram = non-performer, pasyati = is the [proper] viewer [perceptor or has vivekam].