Cut the paneer block into bite size pieces. Drop the pieces into a bowl, sprinkle ½ teaspoon of salt and pour enough hot water to soak the paneer cubes. Leave it aside for 15 minutes. This will soften the paneer cubes.
Place a heavy bottom pan on medium high heat and drizzle 1 tablespoon of oil. Once the oil is hot, sprinkle the cumin and fennel seeds. Allow it to sizzle for a few seconds. Then, scatter the finely chopped garlic and ginger. Give it a stir and cook for 1 minute.
Scatter the sliced onion, sprinkle rest of the salt, turmeric powder and sugar. Stir and cook for 3 minutes. Then, add the bell pepper followed by cumin powder and chili powder. Stir and cook for 2 minutes.
Add the sliced tomatoes and stir. Cook for about 5 minutes or until the bell peppers and tomatoes are softened.
Drain the soaked paneer cubes and drop it into the pan. Mix it together to coat the spice on the paneer cubes. Cook for 5 minutes, tossing every now and then. If you want it with more gravy, add some water but I like to keep it dry.
After 5 minutes, check for salt and add any, if required. If you prefer the dish to be spicier, add some Garam Masala at the end and cook for a couple more minutes.
Sprinkle finely chopped fresh cilantro, give it a mix and it’s ready to serve.
Note: If you allow the Paneer Jalfrezi to rest for a long time, the paneer cubes will harden a little bit as it is a dry stir fry dish. Before serving, just warm it on a pan or in microwave for a minute and the paneer cubes will soften and turn spongy once again.