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Bring a saucepan of water to a boil. Add spinach and cook for 1 minute. Transfer to a bowl of ice water to keep spinach bright green.
Heat 2 tablespoons oil in a skillet over medium heat. Add cumin seeds to hot oil so they sizzle. Add onion, chile, garlic, and ginger. Cook until onion is golden brown, 3 to 5 minutes. Add tomatoes and cook until soft, about 2 minutes more. Remove from heat and allow mixture to cool.
Transfer tomato mixture to a blender; add blanched spinach. Blend to a thick, smooth paste; thin with a few teaspoons water if needed.
Heat remaining oil in the skillet over medium heat. Add coriander, cumin, chile powder, and turmeric. Fry until fragrant, about 1 minute. Add spinach paste and cook over medium-high heat for 2 minutes. Add water and cook for 5 minutes more. Season gravy with salt.
Add paneer to the gravy and mix well to coat. Cook 5 minutes more. Add garam masala and cream. Stir and cook over low heat for 2 minutes. Garnish with chile flakes.