Cut onion and tomato into chunks.
Heat 2 tsp of oil in a pan and fry red chillies and chana dal until the dal turns golden brown colour.
Take care to keep the heat in medium to avoid burnt chana dal. Transfer to a plate and set aside.
If you want, you can temper in this step and transfer the tempered items to the chutney serving bowl or do it lastly too.
Now, add onion, tomato and cook until it softens.
Cool down everything completely.
First grind chana dal, coconut, salt and red chilli to a coarse powder.
Top it with onion and tomato, and grind to a smooth paste. Add little water while grinding.
Transfer to the serving bowl. Mix well. Adjust water if needed to reach desired consistency.