[proofplan]
We fix the sign convention by using the defining function $\rho$ that is positive on the prescribed side $\Omega^+$. The statement has been made explicitly conditional on Lewy's local one-sided [extension theorem](/theorems/59), whose sign convention says that a positive Levi eigenvalue for $\rho$ gives extension into the negative side $\{\rho<0\}$. The proof verifies that the present hypersurface, defining function, Levi-form hypothesis, and CR datum satisfy that analytic input, and then records the resulting boundary trace identity.
[/proofplan]
[step:Normalize the hypersurface and the positive side]
Let $\rho:U\to\mathbb R$ be the chosen $C^\infty$ defining function, with $\Omega^+\cap U=\{\rho>0\}$. Since $d\rho_p\ne 0$, after shrinking $U$ and applying a holomorphic affine change of coordinates sending $p$ to $0$, we may assume that the complex tangent space is
\begin{align*}
T^{1,0}_0M=\operatorname{span}_{\mathbb C}\left\{\frac{\partial}{\partial z_1},\dots,\frac{\partial}{\partial z_{n-1}}\right\}.
\end{align*}
Write the normal complex coordinate as $z_n=s+it$, where $s:=\operatorname{Re} z_n$ and $t:=\operatorname{Im} z_n$ are real coordinate functions on the last complex factor.
The hypothesis says that the Hermitian form $\mathcal L_{\rho,0}$ has a vector $L\in T^{1,0}_0M$ with
\begin{align*}
\mathcal L_{\rho,0}(L,L)>0.
\end{align*}
After a unitary change in the tangential variables, we may take $L=\partial/\partial z_1$ at $0$. With the convention $\Omega^+=\{\rho>0\}$, the local Lewy sign convention is that a positive eigenvalue of $\mathcal L_{\rho,0}$ produces extension into the side on which the defining function is negative, namely $\Omega^-\cap U=\{\rho<0\}$.
[/step]
[step:Apply the stated Lewy analytic input on the opposite side]
Let $u\in C^\infty(M\cap U;\mathbb C)$ satisfy $\bar\partial_bu=0$ on $M\cap U$. Define the antiholomorphic CR tangent bundle by $T^{0,1}M:=\overline{T^{1,0}M}$; the condition $\bar\partial_bu=0$ means that every smooth local section of $T^{0,1}M$ annihilates $u$ on $M\cap U$. We apply the analytic input stated in the theorem with defining function $r:=\rho$ and base point $p$. Its hypotheses are: $M$ is a $C^\infty$ real hypersurface, $r$ is a $C^\infty$ local defining function with $dr\ne 0$ on $M\cap U$, $u$ is a smooth CR function on $M\cap U$, and $\mathcal L_{r,p}$ has a positive eigenvalue. Since $r=\rho$, these hypotheses are exactly the assumptions in the theorem statement. The conclusion of the analytic input applies to the side $\{r<0\}=\{\rho<0\}=\Omega^-\cap U$.
Therefore, after shrinking $U$, there exist a neighbourhood $V\subset U$ of $p$, an open one-sided neighbourhood $W\subset V\cap\Omega^-$ with $p\in\overline W$ and $M\cap V\subset\partial W$, and a function
\begin{align*}
F:W\to\mathbb C
\end{align*}
which is holomorphic on $W$, smooth up to $M\cap V$, and satisfies
\begin{align*}
F|_{M\cap V}=u|_{M\cap V}.
\end{align*}
[guided]
The sign is the delicate point, so we keep the defining function fixed. We chose $\rho$ so that $\Omega^+\cap U=\{\rho>0\}$, and therefore the opposite side is
\begin{align*}
\Omega^-\cap U=\{z\in U:\rho(z)<0\}.
\end{align*}
The analytic input included in the theorem statement says that, for a defining function $r$ with a positive Levi eigenvalue at the base point, smooth CR functions extend to the side $\{r<0\}$. Here we take $r:=\rho$, so the target side in that input is exactly $\Omega^-\cap U$.
We now verify every hypothesis of that input. The hypersurface $M$ is $C^\infty$ by assumption. The map $\rho:U\to\mathbb R$ is a $C^\infty$ local defining function and satisfies $d\rho_q\ne 0$ for every $q\in M\cap U$. The Levi form
\begin{align*}
\mathcal L_{\rho,p}:T^{1,0}_pM\times T^{1,0}_pM\to\mathbb C
\end{align*}
has a positive eigenvalue by hypothesis, meaning that some non-zero $L\in T^{1,0}_pM$ satisfies $\mathcal L_{\rho,p}(L,L)>0$ after diagonalising the Hermitian form. Define $T^{0,1}M:=\overline{T^{1,0}M}$. The condition $\bar\partial_bu=0$ means that every smooth local section of $T^{0,1}M$ annihilates $u$ on $M\cap U$, so $u\in C^\infty(M\cap U;\mathbb C)$ is a smooth CR boundary datum.
The analytic input therefore supplies a neighbourhood $V\subset U$ of $p$, an [open set](/page/Open%20Set) $W\subset V\cap\Omega^-$ with $p\in\overline W$ and $M\cap V\subset\partial W$, and a map
\begin{align*}
F:W\to\mathbb C
\end{align*}
which is holomorphic on $W$, smooth up to $M\cap V$, and has trace
\begin{align*}
F|_{M\cap V}=u|_{M\cap V}.
\end{align*}
This proves the asserted one-sided extension, conditional on the stated Lewy analytic input.
[/guided]
[/step]
[step:Recover the original CR function as the boundary value]
The preceding step has already supplied a function $F:W\to\mathbb C$ that is holomorphic on $W$, smooth up to $M\cap V$, and satisfies
\begin{align*}
F|_{M\cap V}=u|_{M\cap V}.
\end{align*}
Since $W\subset V\cap\Omega^-$ and $M\cap V\subset\partial W$, this is a one-sided holomorphic extension to the side opposite the one on which $\rho$ is positive. This proves the stated conditional form of the Lewy extension principle.
[/step]