Heat the oil in a small skillet over medium heat; cook the lentils, mustard seed, and red chile peppers in the hot oil until the seeds start to burst. Remove from heat and add the green chile peppers and asafoetida powder; stir. Allow to cool slightly; grind the mixture to a coarse powder using a mortar and pestle.
Return the skillet to the heat with 1 tablespoon oil; cook the onion in the hot oil until softened, about 5 minutes. Stir the tomatoes into the onion and continue cooking until most of the liquid has evaporated, about 3 minutes. Add the mixture to the lentil mixture; grind until the onions are completely crushed into the mixture. Season with salt; fold the cilantro leaves into the chutney to serve.