Heat oil in a pan and add pottukadala. Fry it for 1-2 mins. Add dry red chilli. Fry for a min. Add sliced tomato and onion. Mix well. Cook till the onions and tomato becomes soft. You dont need to brown the onions. Remove it from gas and let it cool for 10-15 mins.
Grind together the above mixture with tamarind, salt and 1-2 tbsp water to a smooth paste. Serve with Idli, Dosa, Oats Idli etc;
Notes
You can add a small piece of tamarind initially and add more later after doing a taste test. Sometimes the tamarind might be salty, in that case, be careful while you add salt to the chutney. This chutney has a thick consistency, so it's better not to add more than 2 tbsp water while grinding.