The 30-year-old moved to San Siro on a two-year loan deal in August but has struggled to find form - scoring just once in all competitions.
Reports had suggested Milan may look to call time on Torres' stay, but Mourinho dismissed the idea of the Spaniard returning to Stamford Bridge.
Asked on Friday whether Torres could feature for Chelsea this season, the Portuguese said: "No. He's on loan for two seasons at Milan. He's our player but he's on loan. We have no space.
"We have no space for players in our list, either in the Champions League or the Premier League. That's an impossible picture.
"Nobody from Milan has made contact with us about that possibility, so probably nothing is true. He's happy at Milan and Milan are happy to have him."
Mourinho was also asked about the future of Mohamed Salah - with the 22-year-old forward having made a rare start in the Champions League win over Sporting on Wednesday.
The Portuguese stated Salah would not be sold, explaining: "Salah is our player who we like and trust, a player from our squad who is going nowhere.
"He doesn't go, for sure. Maybe he moves house, but not club."
