I am not able to do Impact Analysis of my CDT. Its is showing server encounter s

If this happening for any CDT and you DO NOT see any errors in the server.log then this can indicate the error is being thrown at the client side. This can happen if you have a large amount of applications (or small amount but big applications) since Impact Analysis will review each item inside them the request on the server can take longer and timeout on the client; by when the server completes the client already timed out with the error you're seeing.

To address the issue delete any unnecessary applications from the Applications tab, most of the times there will be several that were used to bring objects from another environment and after the import are no longer needed; delete those.

Eduardo, if I am understanding correctly, the only process models the Impact Analysis will run against are those in an Application. If I were to delete an Application, and that is the only Application a particular PM is in, does that mean it will never have Impact Analysis executed on it?

The idea of deleting unnecessary applications is to get rid of all those duplicate applications that act as patches or updates to models that are contained within other main applications. It's common for DEV environments to have a large volume of apps and not all of them are in used or some contain objects already contained in other apps, those are the ones I suggest that need to be deleted.

For those unlikely scenarios where you cannot make the number smaller if Impact Analysis is still behaving this way you can mimic its behavior by simply exporting and reimporting your application so your objects get updated. This is exactly the same thing Impact Analysis does behind the scenes.