DOS is always given as an example of single tasking operating system. However when a command is issued through command-line, control switches from the shell to the command and then switches back to shell when the command completes.Thus there are two processes executing simultaneously. Is there something wrong in my understanding ?
No, they weren't executing simultaneously.
COMMAND.COM had a resident portion that was in memory all the time and a transient portion that could be tossed out at will.
When you ran a program, it typically got loaded in place of the transient portion and then run. When the program exited, it did so by calling code in the resident portion which would then reload the transient portion if necessary and continue.
The fact that some of the code remained resident in no way means that it was "running". In a similar way, vast tracts of MS-DOS (the kernel) stayed continuously in memory yet they weren't "running", unless called explicitly by a non-kernel program.
Now there were things can could be said to run concurrently, DOS had plenty of TSR (terminate and stay resident) programs that would run, hook into an interrupt or DOS in some way, then exit but leaving some memory allocated (where its code was).
Then, in response to certain events, that code would be run. Perhaps one of the famous ones was Borland Sidekick which was a personal information manager that would pop up instantly with a keypress.