Preheat oven to 350 degrees F. Lightly grease and flour 2 (9-inch) round cake pans; set aside. Place cake mix, dry pudding mix, 1 cup of the sour cream, eggs, oil, water and orange peel in large bowl. Beat with electric mixer on low speed 1 min.; scrape bowl. Beat on medium speed an additional 2 min. Pour evenly into prepared pans.
Bake 25 to 30 min. or until toothpick inserted in centers comes out clean. Cool completely.
Beat remaining 1/3 cup sour cream and powdered sugar in large bowl with wire whisk until well blended. Gently stir in whipped topping. Set aside.
Place 1 of the cake layers on serving plate; spread with half of the whipped topping mixture. Top with half of the orange segments. Repeat cake and topping layers. Garnish with remaining orange segments. Refrigerate until ready to serve.