In a large bowl, combine the beef, onions, minced garlic, parsley, basil, bread crumbs, egg, milk, parmesan cheese, chili powder, salt, and pepper. Using your hands mix gently, careful not to over mix.
Roll meat mixture into golf sized balls and then fry the meatballs in vegetable oil over medium-high heat, working in batches. Brown them on all sides. Each batch should take about 10 minutes.
Remove the meatballs from the skillet and set aside.
Add the onions and cook until translucent.
Stir in the basil, red crushed pepper, fresh garlic, and cook until fragrant.
Add the crushed tomatoes, red wine, sugar, salt, and pepper. Cook for 20 minutes on low heat.
Add basil and ricotta cheese to the crushed tomatoes and cook for an additional 2 minutes.
Add the meatballs and reserve 1 cup of sauce for later.
Stir in the cooked penne pasta.
Check for seasoning.
Place the pasta in a baking dish and stir in some fresh mozzarella cheese.
Ladle the remaining cup of sauce and then top it off with the remaining mozzarella cheese and parmesan cheese.
Bake in a preheated oven at 450 degrees F. For 15-20 minutes or until the cheese is completely melted.