Buddhism is considered by some to be a religion without a God and without a soul. The statement is true and untrue according to what meaning we give to those terms.
Buddhism does not recognize the existence of a being, who stands aloof from his ”creations,” and who meddles occasionally with human affairs when his capricious will pleases him. This conception of a supreme being is very offensive to Buddhists They are unable to perceive any truth in the hypotheses, that a being like ourselves created the universe out of nothing and first peopled it with a pair of sentient beings ; that, owing to a crime committed by them, which, however, could have been avoided if the creator so desired, they were condemned by him to eternal damnation.
That the creator in the meantime feeling pity for the cursed, or suffering the bite of remorse for his somewhat rash deed, dispatched his only beloved son to the earth for the purpose of rescuing mankind from universal misery, etc., etc. If Buddhism is called atheism on account of its refusal to take poetry for actual fact, its followers would have no objection to the designation.
Next, if we understand by soul atman, which, secretly hiding itself behind all mental activities, direct them after the fashion of an organist striking different notes as he pleases, Buddhists outspokenly deny the existence of such a fabulous being. To postulate an independent atman outside a combination of the five Skandhas of which an individual being is supposed by Buddhists to consist, is to unreservedly welcome egoism with all its pernicious corollaries.
And what distinguishes Buddhism most characteristically and emphatically from all other religions is the doctrine of non-atman or non-ego, exactly opposite to the postulate of a soul-substance which is cherished by most of religious enthusiasts. In this sense, Buddhism is undoubtedly a religion without the soul.
Atman is the ego conceived as a concrete entity, a hypostatic agent which, abiding in the deepest recess of the mind, directs all subjective activities according to its own discretion. This view is radically rejected by Buddhism.
A familiar analogy illustrating the doctrine of non atrnan is the notion of a wheel or that of a house. Wheel is the name given to a combination in a fixed form of the spokes, axle, tire, hub, rim, etc. ; house is that given to a combination of roofs, pillars, windows, floors, walls, etc., after a certain model and for a certain purpose.
Now, take all these parts independently, and where is the house or the wheel to be found? House or wheel is merely the name designating a certain form in which parts are systematically and definitely disposed. What an absurdity, then, it must be to insist on the independent existence of the wheel or of the house as an agent behind the combination of certain parts thus definitely arranged!
from “Outlines of Mahayana” free online here.