Your code is not counting the number of occurrences of "tempCharSearch' in the file, but the number of lines, in which the pattern occurs. As your input file appears to have just three lines, each one containing multiple occurrences, your result is 3.
Use Python's built in string count method to count all occurrences in a line:
cnt += searchpattern.count ('tempCharSearch');
If you want to compare case insensitive then convert both the line string and your search pattern to lower-case before running the count, for example:
for line in readFile:
cnt += line.lower().count ('tempcharsearch');