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Make the tomato sauce: In a medium saucepan, heat the oil over medium heat. Add the onion, garlic and crushed red pepper flakes, and cook, stirring frequently, until softened, 10 to 12 minutes. Add the tomatoes, basil, vinegar, sugar and Parmesan rind, and bring to a simmer. Lower the heat to medium low and cook, stirring occasionally, until slightly thickened, about 25 minutes. Discard the Parmesan rind and, using an immersion blender, blend the sauce until slightly smooth while retaining some texture. Season with salt and pepper to taste.
Make the chicken Parmesan: In a small bowl, whisk together the panko bread crumbs with ¼ cup of the grated Parmesan and the dried oregano. Transfer to a shallow dish, such as a pie plate. Transfer the flour and the beaten eggs to shallow dishes as well, then line up the 3 dishes next to each other in the order of flour, eggs and bread crumbs.
Season the chicken breasts with salt and pepper. One by one, dredge the chicken breasts in flour, followed by egg and panko, making sure to completely coat each breast. Place chicken breasts on a plate until ready to fry.
Preheat the oven to 375° and spread half of the tomato sauce in a 9-by-13-inch baking dish, then set aside. In a 12-inch skillet, heat the canola oil over medium-high heat. Cook the chicken breasts, turning once, until golden brown, 5 minutes per side. Transfer the chicken to the prepared pan, then nestle them into the tomato sauce. Pour the remaining half of the tomato sauce over the middle of each breast, making sure to not completely cover all of the breasts with tomato sauce. Layer the mozzarella and sprinkle the remaining Parmesan on top.
Bake until the chicken reaches an internal temperature of 165°, 25 to 30 minutes. Turn the oven to broil and bake until the cheese is bubbling and golden brown, 2 to 3 minutes more. Garnish with basil and serve.