Roast peanuts till they are crisp and splutter. Let them cool well and later powder.Deskinning is not necessary. If you want can do it.Don't do a paste, coarse is enough.
In a pan, heat oil. Add mustard, jeera and urad dal. Let them splutter.
Later add, hing, curry leaves and green chilli.
Add a big sliced Onion, tsp ginger garlic paste. Saute till the raw smell goes and onion turns translucent.
Later add capsicum and saute for 2-3 mins.
Add haldi,salt ,chilli powder / sambar powder and little tamarind water.
Combine everything. Cover and cook for 3-4 mins.Cooking time depends on how you want your capsicum to be. We like it a little crunchy, hence cook only for 3-4 mins.
Lastly add crushed peanuts and little grated coconut ( optional ). Combine everything
Saute for 2-3 mins. And it's done.
Enjoy Capsicum Peanut Masala with Phulka,Chapati, Dal Rice etc.