If I have a character equipped with the Utility Belt and it uses a power action to make smoke cloud with Gas Pellets, is the source of the damage the character or the Gas Pellets. I ask because the damage is penetrating but is the source of the damage the character with the Utility Belt or the resource? If the opposing character affected is M10 Ironman, would his trait kick in?

Here are the relevant powers, traits and effects.


Gas Pellets/Smoke Grenade
Resource

Give this character a power action to use Smoke Cloud until your next turn as a free action. When the hindering terrain markers are removed, deal 1 penetrating damage to each opposing character occupying or adjacent to any of the removed hindering terrain markers.


ADAPTIVE ARMOR: When Iron Man would take damage from a character assigned a relic or resource, Iron Man ignores that damage and rolls a d6. On a result of 1-3, deal Iron Man 1 unavoidable damage. This ability can't be ignored.

I understand if the Utility Belt is showing Poison that the character can use poison so it is the source of the damage but as I read the Gas Pellets, it seems to indicate that the character may not be the source of the damage. Please enlighten me.

Thanks in advance.

The character is the one using smoke cloud and therefore the character is the source of the damage.

Iron Man ignores damage dealt to him by characters with relics assigned to them. This is no exception.