For the Paneer Marinade: Cut the paneer into cubes and place in a bowl or baking dish. Add the yogurt and all marinade ingredients. Gently toss to coat the paneer in the yogurt and spices. Set aside.
For the Tikka Masala Sauce: Set a 4-6 quart saucepot (and a large nonstick skillet) on the stovetop. To the sauce pot add the ghee, diced onion, garlic and ginger. Turn the heat on medium-low and sauté for 8-10 minutes to soften.
Add in the garam masala, salt, turmeric, and Kashmiri chili. Sauté another 2 minutes, then stir in the tomato sauce.
Partially cover and simmer the sauce for 10 minutes.
Scoop the tomato sauce into the blender. Puree until very smooth. Then pour the puree back into the saucepot and stir in the heavy cream and ½ cup water. Turn off the heat and let the sauce rest.
After the sauce is finished and resting, heat the skillet over medium heat. Once hot, place half the paneer cubes in the skillet. Brown the paneer on all sides. Then move the golden paneer cubes to a holding plate and repeat with the remaining paneer. (If you don’t have a nonstick skillet, make sure to add oil to the skillet so the paneer doesn’t stick.)
Once all the paneer is cooked, reheat the tikka masala sauce. Mix the Paneer cubes into the sauce, and serve warm with a side of basmati rice and a sprinkle of fresh cilantro
Transfer cooled leftovers to a sealed container and keep in the fridge for up to 4 days. Because of the heavy cream I do not recommend that you freeze.