Drain the soaked paneer but reserve 1 cup of paneer water for later use. If using fresh paneer, no need to soak. Using the same pan heat up ½ tbsp of ghee or butter on medium heat add ¼ tsp of chili powder, ¼ tsp of turmeric powder to the pan, and add the paneer. Sauté the paneer with the spices and add a good pinch of salt. Stir the paneer well so that its properly coated with the spices. Sauté for 2 minutes and then add pureed spinach.
Gently stir everything making sure not to break the paneer. If the palak paneer is too thick , add a bit of the reserved paneer water or hot water to loosen up the spinach mixture.