in chapter 7 what are the real reasons behind the council's regection and fear of the gift?

If the council accepts it, their underlying ideology and hence power over the people will be compromised. They rule on the precept that the masses remain afraid, ignorant, and literally "in the dark". To accept this "gift" would shed light on the ignorance they have worked so hard to instil into their citizens.

The idea of fame suggests a certain level of separation from the common man that seems more individualist than collectivist, and accordingly the concept of invention is associated with fame and achievement. However, the candle came long before the Great Rebirth, and the members of the Council are huddled "as shapeless clouds," again emphasizing the bodiless nature of collectivism. They are confused by the presence of an intruder, for just as no one had ever thought to escape the Palace of Corrective Detention, no one has thought to interrupt the World Council, and they are particularly shocked by his low status. You can check out this GradeSaver link for more: