Because it is using the default system PATH, and not yours, so it cannot find the Python program. My .bash_profile has a custom PATH statement in it that also includes my $HOME directory, and current (.) directory. You may have to still use ./PicToText.py to force it to look in the Documents folder for that script — or its full path.
Also, if your Python program is written to get ARGV elements passed in from the previous action, then change the pass input to Arguments. If you are using the Python fileinput module to slurp standard input, then leave the current setting to stdin.
(cd ~/Documents; source ~/.bash_profile; python -d -c PicToText.py) > ~/Desktop/PicToText.log