It(')s has an interesting history. When I was in school I was taught that there are two forms of the word it(')s
- its - possessive
- it's - contraction of it is
If I were in school and mixed up these two I would be admonished. There's a part of my brain I will never be able to exorcise the belief that confusing these two spellings is a sign of poor grammar. But equally, my brain never liked the apostrophe-less its for possession. The word seemed naked to me.
It(')s sits at the crossroads of the two main uses of the apostrophe in English, contraction and possession.
The possessive form of it(')s has an interesting quirk in that it sits at the crossroads of another inconsistency - do possessive pronouns get apostrophes? If you think of it as a pronoun akin to his, hers, and theirs (sometimes called "definite" pronouns) then the apostrophe-less its seems fine. If you think of it as similar to other neutral pronoun possessive like one's or somebody's ("indefinite" pronouns, then the absent apostrophe seems inconsistent. The concept of definite pronouns was never pointed out to me in school, primary school me intuited that its should be treated the same as my name but I was told that it was just an edge case I would have remember forever
My childhood assumption is more reasonable than my teachers would have told me. Like many grammar rules, the rules around it(')s have changed over time. Etymonline claims possessive it(')s dates back to the 1500s and was originally spelt it's, only in the 1800s did the apostrophe fall out of use. It seems like the 1800s change occurred to make room for contracted it's because the other contraction for it is, 'tis, fell out of fashion.
Given the attitude my teacher had when teaching this "rule", I find the youth of this "rule" very satisfying. The unconvincing arguments they gave supporting it are not set in stone.
The part that is most stupid about this whole situation to me is that the apostrophe does very little to actually make things clearer. It is extremely hard to construct sentence where the meaning of it(')s cannot easily be gleaned from context, and most sentences where either form is valid in the same place sound awkward.
The closest example I have found to a sentence where the apostrophe adds semantic clarity is this:
The company announced it(')s plans for expansion.
If it(')s is possessive, then semantically it means "the company has announced the plans it has for expansion".
If it(')s is a contraction, then semantically the sentence means "the company has announced it has plans for expansion".
These are different, but I find the second form very awkward.