It's is a contraction of “it is” and Its with no apostrophe is the possessive word
For example
It's (it is) going to be a rainy day!
and
I tried to arrange my shoes wrong and i realized that’s not its box.
Answer: I believe its true
Explanation:
The first sentence has the pronoun reference error. it sounds like AL is scratching not the dog. the error is using "he" just eliminate the word.