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1. For sauce, in a medium saucepan cook onion and garlic in hot butter until onion is tender. Carefully stir in the undrained tomatoes, sugar, salt, and pepper. Bring to boiling; reduce heat. Simmer, uncovered, for 10 minutes or to desired consistency, stirring occasionally. Stir in basil. Keep warm.
2. Meanwhile, with a meat mallet, pound each chicken breast half between two pieces of plastic wrap to 1/4-inch thickness.
3. In a shallow dish stir together bread crumbs, the 3 tablespoons Parmesan cheese, and oregano. In another bowl stir together the egg and milk. Dip chicken breast halves in egg mixture, then in crumb mixture to coat. In a 12-inch skillet cook chicken in hot oil over medium heat for 2 to 3 minutes on each side or until golden. Transfer chicken to a serving platter.
4. Spoon sauce over chicken. Top with shredded mozzarella and 1 tablespoon Parmesan cheese. Let stand about 2 minutes or until cheese melts. Makes 4 servings.