The variable PATH has a predefined meaning: it's the search path for programs. When you type a command name, the shell (or any other program that you tell to execute this command) looks for an executable file in one of the directories mentioned in the PATH variable. In your script, cp is searched in a subdirectory called newimg.png of the current directory (which doesn't even exist, let alone contain an executable file called cp.

Use a different variable name in your script. By convention, environment variables that have a meaning to programs are usually in all uppercase. For variables that are local to a script, you can use lowercase letters to avoid clashes (variable names are case-insensitive). Better, use a more significant name (because having variables that only differ in case is confusing to humans).

#!/bin/bash

echo "Script executed from: ${PWD}"



#copy image and resize it

output_image_name="newimg.png"

output_image_path="${PWD}/${OUTPUT_IMG}"



cp "$1" "$output_image_name"

mogrify -resize 400x300 "$output_image_path"

There's no reason to sometimes use the file name and sometimes the full path here though. Furthermore, instead of copying the file then modifying it in place with mogrify, you might as well use convert directly — convert is the same as mogrify except that it writes to a different output file.

#!/bin/bash

output_image="newimg.png"

convert -resize 400x300 "$1" "$output_image"