Firstly, add 1 cup of water into the Instant pot insert. Place the trivet.
Put the onions, tomatoes, cashew nuts, ginger, garlic, whole spices, and 1 cup of water into a deep pan. Place the pan over the trivet.
Close the Instant Pot with pressure valve to Sealing. Cook on High Pressure for 8 minutes.
Once the pot beeps, let the pressure release naturally.
Puree cooked onion-tomato mixture using a hand blender until smooth. If you don't have a hand blender, puree in a blender in batches once slightly cooled.
Then I usually sieve the onion-tomato puree for silky texture and discard the residue, but it's optional.
Press SAUTE on Instant Pot. Add butter/oil to the POT. Once hot, add cumin seeds and saute for 30 seconds.
Add Kashmiri red chili powder, bay leaf, give a quick stir.
Then add onion-tomato-cashew pureed mixture. Mix well and cook for 2-3 minutes.
Add the paneer, kasoori methi, garam masala, salt. Mix well and bring the mixture to a boil.
Lastly, gently stir in the cream, and paneer butter masala is ready to serve.