Turn the Instant Pot on saute mode and add the butter to the pot. Once the butter has melted, add the onion. Saute for 2-3 minutes, until softened.
Add the garlic, ginger and bell pepper to the pot and cook, stirring, for 30 seconds.
Stir in the garam masala, cumin, smoked paprika, turmeric and salt. Press cancel to turn off saute mode.
Pour in the 1/4 cup water and stir, scraping up any bits that may be stuck to the bottom of the Instant Pot.
Add the tomato sauce and the chicken to the pot.
Close the Instant Pot lid and turn the steam valve to the sealing position. Press the Pressure Cook/Manual button and set the cook time to 10 minutes at high pressure. The Instant Pot will take about 15 minutes to reach pressure and then the cook time will begin counting down.
When the cook time ends, allow the pressure to release naturally for 10 minutes by leaving the Instant Pot alone. Then, carefully move the steam valve to the venting position to release any remaining steam and pressure. When the pin drops down, open the Instant Pot lid.
Remove the chicken to a clean cutting board and let it rest for a few minutes. Meanwhile, stir the coconut milk into the sauce in the Instant Pot.
Cut the chicken into bite size pieces and return it to the Instant Pot.
Serve chicken and sauce over rice, with naan bread and chopped cilantro if desired.