In the screenplay it is confirmed that it was a set-up aimed at turning Pentangeli against Michael. So this is how Puzo and Coppola intended it to be.
As for Geary, he was trying to discredit Cicci as a reliable witness as a favor to Michael. His speech about the Italian-Americans that followed made that quite obvious.
"It was between the brothers Kay -- I had nothing to do with it."
