In the West we wrongly assume that the observer and the observed are fundamentally of the same order which almost suggests that a primary observer is not necessary. But this distinction is important in Indian dharma systems such as Buddhism and Vedanta. Nor is it paradoxical as it is for a Westerner who reasons that if the observer, itself, cannot be observed in the way observed things are, it simply does not exist—why then be concerned with it?
In Buddhism there is an implicit autonomy between that ātman (P., attā) and the anātman (non-ātman), the latter consisting of material shape, feeling, perception, volitional formations and consciousness. Our observer (for now the ātman) can observe these five constituents (skandhas). In fact, the observer is not anyone of these five constituents. The observer recognizes each constituent this way: this is not mine, this I am not, this is not my ātman. We can say at this point, the observer position is a break from the conditioned five constituents that make up our psychophysical organism which is suffering according to the Buddha.
I should add we are closer to answering the question, “Who am I?” which means also, the observer in some yet mystical unseen way is actually not part of the observed world which appears through the five constituents such as material shape, feeling, etc. This may explain why the Buddha said to his monks, “Bhikkhu, you should abandon desire for whatever is anātman” (S. iii. 77). This abandoning process is really the via negativa: we abandon all to reach direct gnosis of the observer. This further means that we must transcend the ever changing dependent originations (pratītyasamutpāda) in order to get there.