atmanam sarva-bhutesu
bhagavantam avasthitam
apasyat sarva-bhutani
bhagavaty api catmani
atmanam—the Supersoul; sarva-bhutesu—in all living beings; bhagavantam—the Supreme Personality of Godhead; avasthitam—situated; apasyat—he saw; sarva-bhutani—all living beings; bhagavati—in the Supreme Personality of Godhead; api—moreover; ca—and; atmani—on the Supersoul.
He began to see that the Supreme Personality of Godhead is seated in everyone’s heart, and that everyone is existing on Him, because He is the Supersoul of everyone.
That everyone is existing on the Supreme Personality of Godhead does not mean that everyone is also Godhead. This is also explained in Bhagavad-gita: everything is resting on Him, the Supreme Lord, but that does not mean that the Supreme Lord is also everywhere. This mysterious position has to be understood by highly advanced devotees. There are three kinds of devotees—the neophyte devotee, the intermediate devotee and the advanced devotee. The neophyte devotee does not understand the techniques of devotional science, but simply offers devotional service to the Deity in the temple; the intermediate devotee understands who God is, who is a devotee, who is a nondevotee and who is innocent, and he deals with such persons differently. But a person who sees that the Lord is sitting as Paramatma in everyone’s heart and that everything is depending or existing on the transcendental energy of the Supreme Lord is in the highest devotional position.

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