Combine yogurt, lemon juice, Kashmiri red chili powder, garam masala, cumin, coriander, salt, and oil in a large bowl. Add chicken and coat thoroughly. Cover and refrigerate for at least 30 minutes.
Heat a cast iron or heavy skillet over high heat with a thin film of oil. Sear chicken in a single layer, 4 to 5 minutes per side, until charred in spots and the internal temperature reaches 74°C (165°F). Work in batches. Set aside with resting juices.
Melt 2 tbsp butter with 1 tbsp oil in a wide saucepan over medium heat. Cook diced onion for 12 to 15 minutes until golden. Add garlic and ginger; cook 2 minutes.
Add all ground spices. Stir constantly for 60 to 90 seconds until the mixture darkens and smells fragrant.
Add crushed tomatoes and tomato paste. Simmer uncovered 15 to 18 minutes, stirring occasionally, until the sauce darkens and oil separates visibly at the edges.
Blend until smooth with an immersion blender (or countertop blender, cooled slightly). Return to low heat.
Stir in heavy cream, remaining 1 tbsp butter, and sugar. Simmer 5 minutes on low. Crush kasuri methi between palms and add. Taste for salt.
Add seared chicken and resting juices. Simmer 5 minutes on low. Serve hot.