The words penance, pennants sound the same but have different meanings and spellings. Why do penance, pennants sound the same even though they are completely different words?
The answer is simple: penance, pennants are homophones of the English language.
An act of self-mortification or devotion performed voluntarily to show sorrow for a sin or other wrongdoing.
A sacrament in some Christian churches that includes contrition, confession to a priest, acceptance of punishment, and absolution. Also called reconciliation.
To impose penance upon.
Plural form of pennant.
Definitions from The American Heritage® Dictionary of the English Language, 4th Edition, from Wiktionary, Creative Commons Attribution/Share-Alike License and Wordnik.
Homophones (literally "same sound") are usually defined as words that share the same pronunciation, regardless of how they are spelled.
If they are spelled the same then they are also homographs (and homonyms); if they are spelled differently then they are also heterographs (literally "different writing").