In my point of understanding penalty means when your site do not satisfy with the Google's algorithm, then Google will remove/ban your site temporarily

In my point of understanding penalty means when your site do not satisfy with the Google's algorithm, then Google will remove/ban your site temporarily

Google doesn't often actually penalize a web page, it devalues it so that it lowers in rank. A weak page can be the result of many things including: poor content, bad SEO, little popularity ...

why search engine update algorithm in 2-3 month? is there any specific reason, or it's improvement on website?

In my point of understanding penalty means when your site do not satisfy with the Google's algorithm, then Google will remove/ban your site temporarily

When you don't follow google guideline, Google devalue your site by many means like, degrading search result ranking, De-indexing pages, removing backlinks or completely banning from search result

Google always changes algorithm for giving the accurate result, penalty occurs when one does not apply the ethical way or does not follow the guidelines for the search engine. Sometimes, Google de-values the links and that is the reason why your ranking does not appear or goes down.