Preheat oven to 400°. In a large skillet, cook and crumble sausage with onion over medium heat until no longer pink, 5-7 minutes; drain. Add garlic and tomato paste; cook and stir 1 minute.
Stir in tomatoes, tomato sauce, basil, ½ teaspoon pepper and salt; bring to a boil. Reduce heat; simmer, uncovered, until slightly thickened, 10-15 minutes.
In a bowl, mix egg, ricotta cheese, 1-¼ cups Parmesan cheese and the remaining ¼ teaspoon pepper. Spread 1-½ cups meat sauce into a greased 13x9-in. baking dish. Layer with 4 noodles, 1-½ cups ricotta cheese mixture, 1-½ cups mozzarella cheese and 1-½ cups sauce. Repeat layers. Top with the remaining noodles, sauce and mozzarella and Parmesan cheeses.
Cover with greased foil; bake 30 minutes. Uncover; bake until lightly browned and heated through, 5-10 minutes. Let stand 15 minutes before serving.
